London: Tata Steel has asked employees at its Corus unit to “brace themselves” to bring profit margins of European business closer to its Jamshedpur plant back home, but ruled out closing any of the four main plants in Europe.
Asserting that Corus acquisition, which was consummated much before the ongoing downturn began in the steel sector, remains a “very good deal”, Tata Steel chief B Muthuraman told Financial Times in an interview that there was a significant scope for improving efficiency and cut costs at Corus plants.
“We continue to think this was a very good deal for us... This acquisition is like a marriage. You don’t suddenly think that marrying your wife is a mistake just because of some other event that’s happened in the world,” Muthuraman said.
Tata Steel completed acquisition of Corus in a deal valued at about $13 billion last year, after months of a tough bidding war with Brazil’s CSN, and the deal was seen as a major platform for the Indian steel giant’s global expansion.
However, steel sector has been hit hard in the recent months by the downturn in worldwide economy and companies across the world, including market leader Corus have cut down their production due to a slump in demand from sectors like auto, construction and engineering.
Tatas have also announced to slash production at its British and Dutch plants of Corus by 30% till March.
The British business daily quoted Muthuraman as saying that employees in Corus’s steel operations will have to brace themselves in the next few years to bring profit margins closer to the levels being seen at Jamshedpur.
Tata Steel has a total capacity of close to 7 million tonnes at Jamshedpur in Jharkhand.