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Minor impact of European debt crisis on company's operations, says Tata Steel

Kolkata, Sat, 12 Nov 2011 ANI

Kolkata, Nov 12(ANI): The Managing Director of Tata Steel, H.M. Nerurkar, today said that the impact of the Eurozone debt crisis on the company's operations would not last for too long, and added that there was need to quickly resolve the problem.

 

Addressing mediapersons in Kolkata, Nerurkar said: "One is always hopeful in this world that it should get resolved quickly. If you ask me time frame, it is extremely difficult for me, because the crisis is yet to unfold fully, then only it will get resolved."

 

"I think I expect that crisis needs to be resolved very quickly. The impact on our operations in Europe will be that yes, the market demand will be sluggish and the demand in Europe will then depend more on what Europe can export to the areas where the demand exists," he added.

 

Tata Steel missed forecasts with an 89 percent collapse in quarterly profit and warned of tough conditions for the next few quarters from volatility in raw material prices and weak demand in Europe.

 

The world's No.7 steelmaker had earlier said persistently low demand in the construction sector in Europe, where operations account for two-thirds of its global capacity of about 28 million tonnes, was a matter of concern.

 

Nerurkar further said that the situation depends largely on the global prices.

 

"You will find typically a commodity price will be, commodity steel price will be import landed plus about 500-750, or whatever that is. So, it really depends on the global prices, right now we find some issues with the Chinese steel prices, but and secondly, dollar which has become rupee-dollar ratio rate is becoming quite favourable for not importing," said Nerurkar.

 

The 500 billion dollar global steel industry is facing an uncertain outlook, with several European firms cutting output in recent months.

 

Tata Steel reported net profit of 2.1 billion rupees for the fiscal second quarter ended September 30, compared with net profit of 19.8 billion rupees a year earlier.

 

Net sales rose 16 percent to 325.07 billion rupees. (ANI)

 


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