Mumbai: Ratan Tata, chairman of Tata Steel, on Tuesday said the company needs to take "hard decisions" to restructure its operations as 2011-12 was a difficult year due to slackening of steel demand globally.
The comments came just a day after Tata Steel reporting a 89 per cent plunge in its June quarter net profit to Rs 598 crore. In 2011-12, company's profits had gone down by 2.46 per cent to Rs 6,696.42 crore.
Describing the financial performance of the company in the last quarter as "a matter of concern", he said that Tata Steel has been through the bad times before and it has the "fortitude to see itself through".
Tata was addressing the shareholders at the annual general meeting (AGM) in Mumbai, his last as company chairman as he will be demitting office in December.
"We have to reduce cost and (be) more cost-efficient. We have to take hard decisions to restructure our operations. I believe there is inherent strength in the company to overcome present challenges," he said.
Tata further said that the company needs to identify and source raw materials more effectively for European operations, whose performance has been impacted significantly in recent times due to financial crisis in the Euro-zone economies and fall in steel demand.
"(We are) trying to make the European operations as efficient as we can. We are rationalising product mix, opening more markets... We are doing everything we can to go through the crisis," he said, while saying that the situation will remain like this for few more years.
"There is rather grim situation in Europe and UK. Steel demand is low... Pressure is on steel industry and steel mills are being closed due to fall in demand and oversupply. Margins are squeezed for steel industry," he said.
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