Friday, May 31, 2002
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By Our Staff Correspondent
Speaking on the plans for the current year, B. Muthuraman, Managing Director, said the company was focusing on a superior product mix — from around 7 tonnes of cold rolled and galvanised material produced in 2001-02, Tisco hopes to produce more than one million tonnes of the same in the current year. The company will be producing more CR products for appliances and skin panels for the automobile industry where there is higher value addition. Tisco is now evaluating the ferro chrome project and would take a decision in the next 3-4 months. Also, it is looking at venturing into titanium mining and had applied for mining leases in Tamil Nadu and Andhra Pradesh. The Indian steel industry, Mr. Muthuraman said, has an overcapacity of three million tonnes in the flat steel segment and there is no greenfield capacity coming up in the Indian steel industry at least till 2005. The steel industry is characterised by its fragmented nature and while globally there is consolidation that has been taking place, there are no signs of consolidation in the Indian steel industry. For the year ended March 2002, Tata Steel's production was at 3.59 million tonnes against 3.41 million tonnes in the previous year. The company sold 3.53 million tonnes (3.4 million tonnes). Net sales were lower at Rs. 7,607.48 crores (Rs. 7,759.44 crores), operating profit at Rs. 1,271.18 crores against Rs. 1,706.53 crores. Other income accounted for Rs. 85.63 crores against Rs. 50.61 crores. The company provided Rs. 369.75 crores (Rs. 376.61 crores) towards interest charges and Rs. 524.75 crores (Rs. 492.25 crores) for depreciation. The depreciation charges were higher as the company capitalised the continuous galvanizing line (CGLII) at Jamshedpur which commenced production in July 2001 this year. Besides the company provided Rs. 227.02 crores (Rs. 201.52 crores) for employee separation compensation, Rs. 15.50 crores (Rs. 49 crores) for taxation and Rs. 30.60 crores (nil) for deferred tax. * * * Price hike in offing "Effective from June 1, we will be increasing the price of flat products by Rs. 500-800 per tonne," said Mr. Muthuraman, while addressing a press conference here today. This is the third hike in prices announced by the company and follows increases of Rs. 700-800 a tonne made in April and May 31 in flat products. Mr. Muthuraman said the price increase will be sustainable and there are unlikely to be any further hikes. "The increase in price is not resting on a demand increase. The reason is partly a global phenomena — although consuming industries have picked up, it is not by much. A demand pull is expected to happen," said Mr. Muthuraman adding that the price of flats was still below the prices prevailing last year. Flat products prices reacted by around Rs. 2,300-2,500 a tonne in the last financial year. In the U.S., in the current year, already prices have increased by $75-125 a tonne and in the rest of the steel producing countries by $ 30-40 a tonne. Mr. Muthuraman also said that domestic prices, following the decline, are lower than landed prices since April 2001.
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