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Tata Steel cuts Tarapur unit production by 15% on auto slump

The 3-lakh tonne plant in the Palghar district of Mumbai, caters to nearly 30% of Tata Steel's supplies to the automotive sector. The slowdown is also likely to impact sales from the plant this year as capacity utilization has come down to around 85%.

Updated: Oct 18, 2019, 09.20 PM IST
The inventory at the factory has also piled up as dealers have not picked up the finished products.
The deepening slowdown in the automotive sector has resulted in Tata Steel's cold rolled steel unit here cutting production by 15 percent since the past six months.

As much as 30 percent of the 3-lakh tonne capacity at the Tarapur plant in Palghar district north of Mumbai, is automotive steel.

The prolonged slowdown is also likely to impact sales from the plant this year as capacity utilization 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 chief of cold rolling complex (west) Ujjwal Desai told a select group of visiting reporters.

"We had witnessed a similar slowdown in the past, especially in FY01 and FY09. However, we are hopeful that there would be a revival soon," he said, adding, however, 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 to drive sustainabiliyt and 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 said, adding the plant will also have an electrolytic clean line to improve prodcut quality.
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