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Tisco shuts loss-making plate mill
Arijit De
MUMBAI, January 22: Tata Iron & Steel Co (Tisco), the country's largest private-sector steel company, has closed down one of the bearings division's three units, a plate mill, to stem its losses.Three of Tisco's four non-core businesses -- cement, bearings and tubes -- are also expected to incur losses this year, company sources said. Tisco's net profit in 1996-97 declined to Rs 471.6 crore against Rs 589.5 crore in the previous year. The fourth non-core division, ferro chrome and chrome ore, may also end the fiscal with a loss. Despite higher volumes, the division suffered from declining global prices owing to a weak demand for stainless steel. A sheet mill of the bearings division, in Kharagpur, West Bengal, substantially cut production as the bearings business had been hit by a slowdown that plagued its main user industries, primarily the automobiles sector. Tisco is now chalking out a turnaround plan for the tubes division, which includes changing the product-mix in favour of higher value-added
products to improve margins. Company sources said though cement production in 1997-98 would be higher than in the previous year, lower prices had affected sales realisation. Average prices during the current fiscal has been around 7 per cent lower than that in 1996-97. As a result, the realisation is expected to be lower by about Rs 100 per tonne. The company is open to a sell-off of its non-core businesses. "No concrete decision has been taken. But to sell the divisions, if at all, we will first have to turn them around," Tisco sources said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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