Tata Steel has suspended production at its downstream facilities and cut output at steel plants due to the Covid crisis restricting movement of finished goods. However, it is still maintaining mining activities at the captive mines.

The company is focusing on conserving cash and liquidity, besides reducing cost to align with market dynamics and focus on working capital management.

In a statement on Thursday, Tata Steel said its mining operations have been operating normally but the integrated steel facilities in Jamshedpur, Kalinganagar Angul (Tata Steel BSL) and Gamahria (Tata Steel Long Products) have started reducing production levels and operations in the downstream facilities have been suspended and put on care and maintenance mode.

In view of the restrictions in the despatch of finished goods and poor market conditions due to the shutdown of customer operations in automotive, construction and other segments, shipments to customers have been curtailed, it said.

However, all payments to MSME vendors and contract workers are made on due dates. Tata Steel is keeping a watch on the evolving situation and has taken several initiatives to ensure that operations are ramped up when normalcy is restored.

The Government has issued notifications and clarified that mines, steel, coal, power and fertilisers are essential services and process industries and are exempt from the lockdown measures.

Tata Steel is working closely with Jharkhand and Odisha governments to create modern isolation centres with 1,000 beds in Jamshedpur, Kalinganagar and Gopalpur.

In addition, Tata Steel Foundation is providing nutritious meals to 50,000 most vulnerable people including 80 settlements in and around Jamshedpur.

Tata Steel Europe is operating all the four blast furnaces at a reduced level across the two steelmaking hubs — in Ijmuiden in the Netherlands, and Port Talbot, Wales. Despatches to customers is currently continuing at the revised levels. The situation is under continuous review and the management is prepared to take swift actions depending on the trading conditions, it said.

Overall European steel demand has sharply reduced compared to the normal conditions and many of the company’s customers have paused production, including European car manufacturers.

Tata Steel Europe has therefore reduced production ans focused on preserving cash and liquidity to tide over the challenging period, it added.

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