Tata Steel wins new auto orders as revenues rise
Tata Steel has hailed stronger revenue figures from its European operations as it negotiates their merger with German group Thyssenkrupp. It has also scored a series of orders to supply carmakers.
Tata's European business, which includes its UK arm and the sites in Wednesfield, Walsall and Brierley Hill, increased revenue in the second quarter by 32% thanks to higher deliveries and a rise in the sale of differentiated products.
But pre-tax earnings of £89 million were down by £38m on the same three months last year, partly due to higher raw material prices.
Liquid steel production of 2.6 million tons in the second quarter of the company's financial year was 3% down on the same quarter a year ago.
Deliveries were higher by 15%, in part due to one-off sales and supply chain improvements, said Tata.
Tata Steel Europe's chief executive Hans Fischer said: "In a relatively stable market environment, we continued to strengthen our sales mix with deliveries of higher value differentiated products increasing by almost 200 basis points in the last year to about 38% of total sales.
"This has been made possible by new products we have brought to market. In the past quarter, we launched five new products including a new range of coated steels for the construction industry which comply with new environmental legislation while retaining the durability and weather resistance demanded by customers. We also launched a new tube product ideal for manufacturers of trailer axles for heavy-goods vehicles.
"Meanwhile our continued focus on close working relationships with customers led to us securing a number of orders in the automotive sector, including supplying steel for the outer panels of a sports utility vehicle made by a prestige German manufacturer."
The company's Indian parent group, Tata Steel, has signed a memorandum of understanding creating a new 50-50 joint venture with German steel group Thyssenkrupp. It will be made of part of the German company's business and all of Tata Steel Europe.
The deal to separate the £15bn British Steel Pension Fund from Tata Steel Europe, with a £550m payment from the company, was key to the deal.
Tata has also sold its 42-inch and 84-inch pipe mills in Hartlepool to Liberty House group.
