Dear Shareholders,
Greetings
The global steel industry which had got impacted severely by the financial crisis of 2008-2009 saw a steady recovery in 2010 driven by the stimulus packages globally, resilience of emerging economies and an overall market recovery. While the worst seems to be over for the steel industry, there is no consensus on the pace of the recovery.
Thailand’s economy rose 3.9% y-o-y, but the economy having strong fundamentals and robust domestic market, was not able to realize its tremendous potential, as government projects got delayed due to political uncertainty. The growth in steel intensity in Thailand was driven by the expansion in auto segment, which led to rise in scrap prices, essential raw material for the EAF manufacturers. Long product prices due to muted demand did not witness matching price increase, compressing margins and hurting the financial performance of your company.
In FY10 we successfully commissioned the Mini Blast Furnace (MBF). Changes in raw material contracting dynamics and supply chain disruptions, led to increased volatility in raw material prices, impairing the efficacy of the Mini Blast Furnace. This phenomenon affected steel manufacturers globally, and not only the Company in isolation.
In spite of series of pressures faced by the Company, not entirely of its own making, Company continued to deliver on its all round performance. The production output increased by 6% and we continued enriching our product-mix. Market share in the Special Wire Rod category increased to 37%, while maintaining leadership position, in product segments like Rebars and Wire Rods.
We have begun FY12 on a cautious but determined note, with a strong belief that the worst is behind us. We are aware of the urgent need to re-prioritize production strategies in consonance with changing market conditions. We plan to execute our multi pronged strategy with the aim to improve Company’s profitability. In line with our overall endeavor to de-commoditize the rebar business and introduce differentiated products, we are planning to launch “TATA TISCON”. We aim to achieve higher market penetration and customer intimacy, through our ongoing ‘Retail Value Management’ program. Our focus is to build on relationship with customers as opposed to competitors, who play the market for short-term gains.
We are focused to reduce the cost base of the company, by leveraging parent company’s global position to access raw materials and making Improvements in operating parameters, harnessing domain knowledge available with the parent. Thailand, is poised to grow briskly, with the Company partnering, in the historic task of nation building. We are a value driven, socially responsible, corporate house; committed to create value for all stakeholders.
Lastly, the Board of Directors would like to express our gratitude to the shareholders, customers, employees, business alliances, financial institutions both local and overseas, media as well as all other related government and private agencies for their trust and support upon our business.
