RISING raw material costs and weak prices in Europe have led to a large drop in quarterly profits at Tata Steel.
The Indian company, which employs more than 2,000 people in South Yorkshire, reported an 89 per cent fall in second-quarter consolidated net profit yesterday.
Tata Steel reported profit of 2.12 billion rupees, compared with 19.79 billion rupees a year earlier.
The steelmaker was dealt a hard blow by sharp declines in demand following the financial crisis of 2008. It shed around 1,500 jobs during 2009.
Its fortunes improved after the company decided to focus on high-value markets.
The company has manufacturing and technology operations in Rotherham. It has also got a manufacturing base in Stocksbridge, South Yorkshire.
Managing director of Tata Steel’s speciality steels business, Mark Broxholme, said yesterday: “Tata Steel continues to build on the radical restructuring and refocusing of the speciality steels operations in Rotherham and Stocksbridge that returned them to profitability two years ago.
“This is reflected in the fact that, in the last year, the company has invested more than £20m in South Yorkshire.
“The latest investment involves projects in Rotherham and Stocksbridge totalling £4.5m to improve plant reliability and energy efficiency, reduce CO2 emissions, and boost production of high-value steel products.”
The $500bn global steel industry is facing an uncertain outlook, with European firms announcing production cuts in the face of weakening demand.