Amid auto slump, Tata Steel unit in Maharashtra’s Tarapur cuts output by 15%

The deepening slowdown in the automotive sector has resulted in Tata Steel's cold rolled steel unit here cutting production by 15% since the past six months.

The 3-lakh tonne plant at Tarapur in the Palghar district north of Mumbai, caters to nearly 30% of Tata Steel's supplies to the automotive sector.

The prolonged slowdown is also likely to impact sales from the plant this year as capacity utilization has come down to around 85% now, a senior company official has said, adding last fiscal, the plant had revenue of ₹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% till last fiscal has come down to 85%," Tata Steel's head of cold rolling complex (west) Ujjwal Desai told a select group of visiting reporters.

He said the inventory at the factory has also piled up as dealers have not picked up the finished products.

"We had witnessed a similar slowdown in FY01. However, we are hopeful that there would be a revival soon," he said, adding 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 ₹1,200 crore, he added.

"We are also setting up an acid regeneration plant in this complex which 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 added.

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