REVIEW OF OPERATIONS - INDIA

Cold rolls at the Jamshedpur Steel Works.



25%RISE IN EBITDA OVER THE LAST FINANCIAL YEAR FOR THE INDIAN OPERATIONS


Tata Steel Group recorded a strong, all-round performance across all its sectors in the fiscal year 2010-11. The results confirmed the major turn around achieved over the previous financial year (FY 10), with a consolidated net profit of  8,983 crores, an improvement of 10,992 crores over the loss of  2,009 crores in FY 10. The Company’s total income rose by 15.6% to 119,734 crores.

The Indian operations’ profit after tax of   6,866 crores and EBITDA of  12,224 crores were the highest ever and were due to higher volumes, improved product mix and higher realisations. While turnover in FY 11 at  29,396 crores rose by 17% over FY 10, the Company recorded a 25% rise in EBITDA over the last financial year.

India is one of the fastest growing economies in the world, with scope for a large increase in per capita consumption. Tata Steel has adopted a growth strategy and is now focused on expanding its capacity. The Company’s Indian revenues are set to grow in coming years because of the 2.9 mtpa expansion at Jamshedpur and the Kalinganagar Project in Odisha. These, coupled with an enriched product mix and operating improvements, will contribute significantly to future earnings.

A strong Continuous Improvement (CI) culture is embedded in Tata Steel’s Indian operations. ‘Kar Vijay Har Shikhar’ (Conquer Every Peak), the flagship CI initiative, has been implemented across the Company and has resulted in savings of  312 crores. In terms of engineering processes, a cost reduction exercise carried out by the Engineering and Projects division resulted in savings of nearly  1,000 crores in project costs.

The key milestones achieved in FY 11 were as follows:
 
  • Total crude steel production of 6.86 million tonnes at Tata Steel India exceeded the installed capacity of 6.8 mtpa.
  • New annual production records were achieved for hot metal from the ’G’ Blast Furnace and hot rolled coil from the Hot Strip Mill at Jamshedpur, for clean coal at West Bokaro and for iron ore from the OMQ Division.
  • Tata Steel India exceeded 1 million tonnes in sales to the automotive sector in FY 11, with best ever Skin Panel and Galvanised Annealed product sales. Sales of branded products also exceeded 1 million tonnes in FY 11.
  • In December 2010 and January 2011, Tata Steel drew a sum of  3,000 crores via issuance of 20 year Non- Convertible Debentures, where the Company will have no cash outgo on account of interest for the first three years.
  • In March 2011, Tata Steel successfully completed India’s first-ever offering of Corporate Hybrid Perpetual Securities through an issue of  1,500 crores. The unique features of the securities are that they are perpetual in nature, with no maturity or redemption, and are callable only at the option of the Company.

SAFETY - AN ONGOING FOCUS A safe workplace is one of the key goals of Tata Steel. The company achieved a reduction of 20% in Lost Time Injury Frequency (LTIF) rate. The company extended its health and safety initiatives through a programme called ‘Wellness@workplace’. This programme was aimed at increasing awareness of lifestyle diseases among the employees. A Health Index has been created to address the health issues of all the employees and to monitor and reduce health-related problems.

However, the eight fatalities in the workplace at Jamshedpur during the year were a cause of concern. The fatalities in the hazardous steelmaking processes area of the steel plant have been properly addressed through initiatives like the Process Safety and Risk Management (PSM) and Behavioural-Based Safety Management (BBSM). The Company has also created a corporate safety function to reinforce safety management in the Raw Materials divisions and other out locations. Corporate safety will also be responsible for strengthening safety management systems at greenfield projects, stock yards, external processing agents, the TIS group of companies, as well as Tata Steel Thailand and NatSteel.

E-CAUP Keeping in view the recent fatalities and implementing the learnings derived from them, the Apex Safety Council has decided to drive a campaign on the Elimination of Commonly Accepted Unsafe Practices at the Steel Works and all out locations, including Mines and Collieries. In this campaign each department will identify unsafe practices and plan to eliminate hazards through foolproof and fail-safe procedures.

Fatality Risk Control Programme A comprehensive Fatality Risk Control Programme was launched in 2008 to eliminate fatality situations at Tata Steel. This process identifies unsafe conditions and eliminates them through engineering solutions. This process has now been extended to unsafe acts as well.

Employees overseeing production at the LD Shop, Jamshedpur.