The reduction was because the company is near completion of its largest greenfield project in Odisha, on which it has already spent Rs 21,000 crore as of March 2015.
Tata Steel, which reported a massive Rs 5,674 crore loss in the March quarter due to non-cash write downs, today said it will spend Rs 10,000 crore in capex this fiscal as it hopes demand conditions to improve over the next few quarters.
"We will spend Rs 10,000 crore in capex in the current year, which is 20-25% lower than Rs 13,500 crore we had spent in FY15 and Rs 16,500 crore in FY 14," Tata Steel Group Executive Director Koushik Chatterjee told reporters here this evening.
The reduction was because the company is near completion of its largest greenfield project in Odisha, on which it has already spent Rs 21,000 crore as of March 2015, he said.
"The reduction in capex plan is due to completion of our greenfield projects. We used to spend around Rs 7,000 crore annually and then increased capex over the years," Chatterjee said, adding the phase I of Kalinganagar project in Odisha will be completed by October.
It reported a massive Rs 5,674 crore loss in the March quarter against net profit of Rs 1,035.87 crore year-ago.
Total consolidated income of the firm declined by 21% to Rs 33,666.18 crore in January-March quarter of 2014-15 fiscal, from Rs 42,428.05 crore in the same quarter of the 2013-14.
For the 2014-15 fiscal, the firm posted consolidated net loss of Rs 3,925.52 crore. It had reported a net profit of Rs 3,594.89 crore in 2013-14, while its consolidated total income declined to Rs 1,39,503.73 crore in 2014-15, from Rs 1,48,613.55 crore during 2013-14.
The construction of the Kalinganagar project has been progressing well and heating of the coke ovens commenced in the second week of May. The project will follow commissioning sequence over the next six months as each facility gets commissioned, he said.
In addition, the first phase of the Gopalpur ferro-chrome plant will be operational by October, Tata Steel India and Southeast Asia managing director T V Narendran said. on the growth prospects, Narendran said steel realisation fell sharply during the second half of FY15 due to the deluge of imports combined with sluggish domestic demand.
Performance was also impacted by mining disruptions.
"We are hopeful that demand will rebound this fiscal on the back of higher investments across key industrial and infrastructure sectors as the 'Make-in-India' campaign starts yielding results," Narendran said.
"We are hopeful of a rebound in demand over the next few quarters, both in the country which will be driven by the make-in-India campaign as well as in Europe," said Chatterjee.
The demand in the European Union is also expected to grow by 1.8% this year as market conditions improve. The depreciation of the euro is expected to boost competitiveness, Tata Steel Europe, managing director and chief executive Karl-Ulrich Köhler said.
In the coming year, the company sees opportunities to further improve sales through higher precision. The European demand is forecast to grow modestly again and the EU steel industry is in a stronger position to benefit than it was pre-crisis, Köhler said, but cautioned that the surging Chinese exports look set to remain a serious concern.
Tata Steel is also consulting with British employees to create sustainable pension arrangements, he added.
The company also continues to pursue its strategy of exiting non-core assets and has initiated action on de-risking its exposure to the British pension scheme that would help the long-term sustenance of the British business amidst difficult business environment, Köhler said.
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