Tata Steel subsidiary Corus is targeting a cost savings of £600 million during the year in a bid to weather the current economic downturn
even as its parent company expects to record improved sales in Q4 of 2008-09 (Jan-March 2009) compared to the earlier corresponding quarter. "Like all European companies, Corus too has had to cut down production by 35-to-40%. But the good thing about Corus is that it has taken up quite a few measures in the short term to weather the storm. This pertains to cost reduction, change in product mix, conservation of cash and lowering of working capital," Mr B Muthuraman, managing director, Tata Steel told reporters on the sidelines of 57th Indian Foundry Congress organised by the Institute of Indian Foudrymen (eastern region). "At Tata Steel, we hope to register a 10% higher sales in February 2009 over January 2009. Our sales in January 2009 saw an increase of 26% compared to January 2008," Mr Muthuraman said. Prices, however, remain depressed at $500-600 per tonne level in Q4 of 2009-10 compared to $800-1,000 per tonne in Q4 of 2008-09. "The economy as a whole may take six months to a year to bounce back. Some sectors like auto, consumer durables are not doing well but the construction sector is not faring badly," he added. Given the current meltdown, Tata Steel is also going slow on acquisitions. "We have not decided on any acquisition for the time being. The acquisitions we had made on the raw material front in Canada, South Africa and Mozambique, will fructify in the next 1-2 years," Mr Muthuraman said. He added there were no funding issues for Tata Steel which is at present engaged in expansion of the Jamshedpur unit to 10 million tonne. The greenfield Orissa project is also in full swing and these are the company's primary expansion projects at present, he said.