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Tata Steel cuts production across sites in India and Europe

Focus on conserving cash and maintaining liquidity
The company added that it was unable to ascertain the impact of the pandemic on the operational and financial performance.

Our Special Correspondent   |   Calcutta   |   Published 01.04.20, 08:27 PM

Tata Steel has announced production cuts across sites in India and Europe amid the virus outbreak.

The company says it will focus on conserving cash, maintaining liquidity and putting in place a strong working capital management during this period.

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It has asked the majority of the employees to work from home and imposed strict restriction on travel and social distancing where workers are still attending essential operations.

The company added that it was unable to ascertain the impact of the pandemic on the operational and financial performance.

Tata Steel, which has a combined capacity of 19.6 million tonnes in India, thus joins other steel majors such as JSW, SAIL and ArcelorMittal in aligning production with the slump in demand.

The measures are being announced by the company despite mining, steel and power being some of the essential industries and exempted from the lockdown measures.

While the company’s mining operations have been operating normally, the integrated steel facilities at Jamshedpur, Kalinganagar Angul (Tata Steel BSL) and Gamahria (Tata Steel long products) have started lowering production levels, while operations at the downstream facilities (finishing mills) have been suspended and put on care and maintenance mode.

“In view of the restrictions in the despatch of finished goods and poor market conditions because of the shutdown of customer operations in the automotive, construction and other segments, shipments to customers have been curtailed, Tata Steel informed.

It is, however, making due payments to MSME vendors and contract workers.

In Europe, steel demand has gone down sharply and many of the company’s customers have paused production, including the European car manufacturers. Tata Steel Europe has reduced production at some of the mills to match this lower demand.

At present, it is operating all four blast furnaces at a reduced level across the two steelmaking hubs — Ijmuiden in the Netherlands and Port Talbot, Wales, UK. Despatches to customers are continuing at the revised levels.

The Tata Steel stock closed at Rs 266.45 on the BSE, down Rs 3.30, or 1.22 per cent. The stock has lost more than 30 per cent in the last one month. 



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