Responding to the Crisis

Tata Steel Thailand (TSTH) Initiatives

Cost control and cost reduction initiatives were carried out, including the reduction of overall maintenance costs by Bh 53 mn during the last quarter and reducing ferroalloy consumption to 12.9 kg/tonne in the third quarter from 13.8 kg/tonne in the second quarter. Cash conservation and liquidity enhancements were achieved through vigorous monitoring. The entire stockpile of inventory built up before the economic downturn was liquidated, resulting in gains worth Bh 4.7 billion by December 2008 compared with the previous quarter. In the absence of a stable domestic market demand, TSTH maximised its exports to India, delivering approximately 23,000 tonnes in the third quarter, and is expediting ACRS certification in order to facilitate exports to Australia.

Raw material sourcing for TSTH’s new mini-blast furnace will be carried out under the Group’s Global Procurement Policy. Iron ore & coke will be sourced using the Group’s synergies, while limestone, other fluxes and injection coals will be sourced from the market.

Initiatives were undertaken to manufacture improved and higher grade medium carbon and high carbon wire rods.