Europe

The manufacturing facilities at Tata Steel Europe comprise of manufacturing hubs (Strip Products Mainland Europe, Strip Products UK, Long Products Europe and Downstream Operations) and Integrated Businesses (Plating, Cogent Power, Speciality and Bar).

Tata Steel has organised its European business into strategic market sectors. The sector teams develop the commercial plan of the business taking into account its differentiated product strategy to secure long-term relationships with its customers. The single pan-European supply chain allocates demand across the manufacturing facilities and distribution channels to maximise operational efficiencies and minimise costs.

The European operations have made good progress in moving to a customer-focused, market sector-based operating model with a cost competitive asset base. Tata Steel Europe has increased the proportion of high-value differentiated products and services in its sales by almost 20% over the last two years. It has also succeeded in taking £200 million of fixed cost out of the business and reduced its steel stocks to record lows by the year-end.

IT-enabled production process at Tata Steel, Europe

The product differentiation strategy secured some notable successes during the year, including:

  • Recognition as a Core Supplier by PSA Peugeot Citroën in the Automotive sector.
  • Supplier Performance Award 2012 from JCB for the Lifting & Excavating sector.

Tata Steel Europe undertook several measures during the year to focus on cash flow management including working capital initiatives, controlling functional costs and overheads.

The Company continued to play its part within the European Steel Association to engage and discuss with the European Commission on the emerging regulations on carbon emissions while also addressing the issues that are required to enhance the competitiveness of the steel industry in Europe.

South East Asia

The South East Asian operations performed well with improving demand, product differentiation, efficiency improvements and restructuring measures.

Riding on buoyant construction steel demand, Natsteel, Singapore

Riding on buoyant construction demand, operations in Singapore performed exceedingly well with an overall sales volume of 900 ktpa despite increased competition and pressure on margins. Implementation of energy saving technologies made NatSteel's Electric Arc Furnace (EAF) one of the most energy efficient arc furnaces worldwide. In its journey towards becoming a specialist construction solutions company, NatSteel has enriched its mix to 66% of value added products. During the year, NatSteel was awarded the World Steel Association Safety & Health Recognition, the Energy Efficiency Partnership Award, the Singapore Compact Green Champion Award and the Singapore Platinum Health Award.

NatSteel's operations in China performed remarkably inspite of volatility in steel prices, weakening construction demand and competition amongst several players. The recent capacity expansion from the new Fuzhou plant increased coverage in China's Fujian province where demand is expected to be relatively stronger. NatSteel also started its downstream operations in Xiamen in March 2013. Thailand posted a y-o-y GDP growth of 6.4% staging a recovery from floods that affected the country in 2011.

Tata Steel Thailand (TSTH) recorded a modest increase in sales volume by 3%, though lower prices in 2012 versus 2011 caused revenues to fall 5% y-o-y. TSTH has further strengthened its leadership position in rebars by increasing its market share from 25% to 29%, helped by strong construction growth in upcountry regions of Thailand while the wire rod product line was adversely affected by cheaper imports from China.

In terms of significant achievements, TSTH has recorded its lowest ever Lost Time Injury Frequency Rate (LTIFR) of 0.46 with zero fatality and has improved its EBITDA performance by 2.5 times compared to the previous year. TSTH has continued its focus on development of new products and launched siesmic rebars, an earthquake resistant rebar, for the first time in Thailand.

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