Tata Steel Cuts Tarapur Unit Production By 15% On Auto Slump
A red hot steel slab passes along a rolling machine. (Photographer: Krisztian Bocsi/Bloomberg)  

Tata Steel Cuts Tarapur Unit Production By 15% On Auto Slump

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The deepening slowdown in the automotive sector has resulted in Tata Steel Ltd.'s cold rolled steel unit in Tarapur cutting production by 15 percent since the past six months.

The 3-lakh tonne plant in Tarapur in the Palghar district north of Mumbai, caters to nearly 30 percent of Tata Steel's supplies to the automotive sector.

The prolonged slowdown is also likely to impact sales from the plant this year as capacity utilisation has come down to around 85 percent now, a senior company official has said, adding last fiscal, the plant had revenue of Rs 1,200 crore.

"The slowdown in the auto sector has impacted us since the past six months. Our capacity utilisation, which used to be 100 percent till last fiscal has come down to 85 percent," Tata Steel's head of cold rolling complex (west) Ujjwal Desai told a select group of visiting reporters.

He said the inventory at the factory has also piled up as dealers have not picked up the finished products.

"We had witnessed a similar slowdown in FY01. However, we are hopeful that there would be a revival soon," he said, adding since September there has been a slight improvement in the demand sentiment.

But revenue growth for the current fiscal may be impacted. Last year the company had reported revenue of Rs 1,200 crore, he added.

"We are also setting up an acid regeneration plant in this complex which will be commissioned in early 2020. So far we have been outsourcing the job to others, but we felt we can do the job ourselves," Desai added.

Also read: Weak Economic Activities, Rains Impact Overall Steel Demand, Says Tata Steel

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