Tata Steel outlines revival programme for European Business
On Monday, Tata Steel submitted its transformation programme in Europe in the bourses. In this programme, the company has defined its revival plan for the European business amid a challenging time it has been facing. It aims to revive the financial health of its European unit and make it self-sustaining and cash positive.
The company, in its exchange filing, said that it is targeting a new way of working to boost productivity and reduce bureaucracy. It also stated that it is focusing more on increasing sales of higher-value steel products and solutions.
Tata Steel has outlined the following main points to revive its European Business unit:
It is looking to reduce its employee strength by up to 3,000 across its Europe’s operations, two-thirds of which are expected to be white-collar jobs.
It aims at increasing the revenue share of higher-value steels by improving product mix and customer focus, and also gain efficiency by optimising production processes, supported by the application of big data and advanced analytics.
It also plans to bring down procurement costs with the help of smarter sourcing and strengthening cooperation with companies within the Tata Steel group.
With this transformation programme, the company hopes to turn cashflow positive by the end of FY21E. Further, it is targeting EBITDA margin of nearly 10 per cent throughout the market cycle.
In the H1FY20, Tata Steel Europe has witnessed almost 90 per cent fall in EBITDA to £31 million.