Management Discussion & Analysis
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d) Review of Operations
1. Tata Steel:
i. Steel Division:
The production details of the Steel division of the company are shown in the following table:
Figures in million tonnes
| Countries | FY08 | FY07 | Change % |
| Hot Metal Crude Steel Saleable Steel |
5.51 5.01 4.86 |
5.55 5.05 4.93 |
(0.7%) (0.8%) (1.6%) |
The major reasons for lower production in FY 2007-08 as compared to FY 2006-07 were shutdowns related to the 1.8 million tonnes steel expansion project, outages of blast furnaces, power breakdown in the first quarter of the FY 2007-08 and refurbishment of coke oven batteries. The decrease in the saleable steel production was more as compared to the hot metal decrease mainly due to in time unavailability of hot metal for the reasons stated above.
The Cold Rolling Mill at Jamshedpur, achieved the best ever annual saleable production of 1.534 million tonnes (the earlier best was in FY 2006-07: 1.523 million tonnes). Individually, the Pickling line and Tandem Cold mill (PLCTM), Batch Annealing Furnace (BAF), Skin Pass Mill (SPM), Electrolytic Cleaning Line (ECL) surpassed their best ever annual production performances during the year. Special emphasis was laid on the product quality improvement in the automotive skin panel with close interaction at customer end and also by improving process capability.
The Hot Strip Mill achieved the best ever annual production of 3.271 million tonnes in FY 2007-08 (the earlier best was in FY 2006-07: 3.239 million tonnes).
In the LD2 & Slab Caster unit, there was a ramp up of the heat weight resulting in improvement in productivity of the unit. The specific refractory consumption was also reduced by almost 7% to improve the cost effectiveness. There were other initiatives also bringing improvement in hot charging, strike rates, reduction in steel related defects for inputs in downstream facilities. As a result, the unit achieved its best ever annual production of 3.361 million tonnes (the earlier best was in FY 2006-07: 3.299 million tonnes).
In the LD2 & Slab Caster unit, there was a ramp up of the heat weight resulting in improvement in productivity of the unit. The specific refractory consumption was also reduced by almost 7% to improve the cost effectiveness. There were other initiatives also bringing improvement in hot charging, strike rates, reduction in steel related defects for inputs in downstream facilities. As a result, the unit achieved its best ever annual production of 3.361 million tonnes (the earlier best was in FY 2006-07: 3.299 million tonnes). In the Long Products area, the New Bar Mill achieved its best ever performance of 0.549 million tonnes (the earlier best production was in FY 2006-07: 0.511 million tonnes). However due to lower availability of hotmetal, the saleable production from all mills in long products was lower as compared to FY 2006-07. All the mills in the long products area focused on improvement in production efficiencies during the year. While the Wire Rod Mill reviewed and upgraded several key process equipments to sustain and increase throughput and rolling them at higher speeds, the New Bar Mill also improved upon its mill speed for various product categories.
The G Blast Furnace, in spite of various problems relating to raw material quality and availability during the FY 2007-08, achieved the best ever annual production of 2.048 million tonnes which was better then the earlier best ever production of 2.011 million tonnes achieved in FY 2006-07.
Other major production highlights of the division were:
- Lower Specific Energy consumption at 6.655 GCal per tonne of crude steel as against 6.717 GCal per tonne of crude steel in FY 2006-07.
- Reduction in dust emission to 0.88 kg per tonne of crude steel as against 0.96 kg per tonne of crude steel in FY 2006-07.
- Highest ever usage of melting scrap of 0.42 million tonnes at LD shops as against previous best of 0.34 million tonnes in FY 2006-07.
ii. Other Business Units
a) Ferro Alloys and Minerals Division
In FY 2007-08, FAMD experienced the effect of positive price changes for the ferro-alloys market. Stable or marginally growing demand along with continued tightness of supply for a number of alloys pushed the prices up quite significantly as compared to the last financial year.
Global Ferro Chrome producers struggled to meet the soaring demand from consumers and High carbon Ferro Chrome spot market prices crossed the level of USD1/lb CIF in the second half of FY 2007-08 for the first time in the history of the business. Fuelled by the Chinese Stainless Steel industry, the global traded volume of Chrome Ore/Concentrate had grown by about 40% in FY 2007-08. India exported about 0.67 million tonnes of Chrome ore/Concentrate in FY 2007-08.
Domestic Ferro Chrome prices moved in tandem with the international market and prices increased by 45% in FY 2007-08 over FY 2006-07. FAMD retained the market leadership with 43% share in the domestic market in
FY 2007-08 for Ferro Chrome.
Shortage of Manganese Ore, rising costs and frequent disruptions in various plants had led to substantial appreciation in both Silico Manganese and Ferro Manganese prices in FY 2007-08. Surge in Manganese Alloy consumption was primarily due to the robust growth in Carbon Steel production world-wide.
The saleable production and sales volume of Ferro Alloys division for the periods FY 2007-08 and FY 2006-07 are shown in the following table:
Figures in million tonnes
| Saleable Production | FY08 | FY07 |
| Chrome Ore Chrome Concentrate Ferro Chrome Ferro Manganese Manganese Ore Silico Manganese |
3 379 201 40 35 43 |
445 466 154 38 274 27 |
| Total | 701 | 1,405 |
Figures in million tonnes
| Sales | FY08 | FY07 |
| Chrome Ore Iron Ore Chrome Concentrate Ferro Chrome Ferro Manganese Manganese Ore Silico Manganese |
17 0 392 186 41 17 39 |
500 16 507 150 39 376 23 |
| Total | 692 | 1,611 |
The curtailment in sales of Chrome Ore and Manganese was the main reason for the drop in the division’s overall saleable production as well as sales.
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