Tata Steel, as it expands in India and undergoes a transition in Europe, is aiming for a cost reduction of Rs 11,500 crore (around USD 1.3 billion) across various regions. The company’s Executive Director and CFO, Koushik Chatterjee, stated that this target will be achieved by focusing on controllable expenses.
In financial terms, cost reductions refer to strategic actions taken by companies to eliminate unnecessary spending and improve profitability and efficiency. During an analyst call, Mr Chatterjee outlined the company’s cost transformation plan, detailing the actions taken so far and those targeted for the next 12 to 18 months.
For FY25, Tata Steel has already implemented cost savings of Rs 6,600 crore, concentrating on fixed cost reductions, manufacturing efficiencies, procurement optimization, and raw material usage, including leaner coal blends and lowered fixed overheads. Looking ahead to FY2026, Tata Steel plans further savings of Rs 11,500 crore across regions, primarily focusing on controllable costs, Mr Chatterjee added.
This announcement comes amid Tata Steel’s ongoing expansion of its Kalinganagar plant, which is increasing its capacity to 8 million tonnes. At the same time, the company is shifting towards green steel production processes in the UK and the Netherlands, which includes announced job cuts in these markets.
In Q4 FY25, Tata Steel reduced its total expenses to Rs 54,167.61 crore from Rs 56,496.88 crore in the same period last year, while also reporting a significant jump in net profit to Rs 1,200.88 crore in the March 2025 quarter. In India, the company expects to achieve Rs 4,000 crore in savings through enhanced operating key performance indicators (KPIs), improved employee productivity, and optimized supply chains. A major focus is also on reducing conversion costs, with an aim to lower costs by Rs 1,000–1,200 per tonne.
In the UK, Tata Steel plans to continue reducing fixed costs, with a target of cutting costs by 29% year-on-year, or around £220 million. The company will also focus on optimising raw material costs, upgrading IT systems to reduce corporate overheads, and streamlining downstream operations.
“For FY2024, our fixed costs stood at £995 million, which dropped to £762 million in FY2025, and we aim to bring this figure down to around £540 million in the coming year,” Mr Chatterjee explained. The company has secured £500 million in government support from the UK to transition towards a scrap-based electric arc manufacturing process.
In the Netherlands, Tata Steel operates the IJmuiden plant, which produced approximately 6.75 million tonnes of liquid steel in FY25. The company has implemented a broad transformation strategy at the Dutch facility, targeting savings of around £500 million through initiatives focused on maximising production, optimising product mix, and increasing operational efficiencies.
Mr Chatterjee noted that discussions with unions regarding the transformation project are ongoing, and the company is engaging with the Dutch government to secure funding and policy support for decarbonisation and environmental initiatives.
The Dutch government has completed the pre-notification filing with the European Commission for the project, and all stakeholders are collaborating on various aspects of the plan. Tata Steel has allocated Rs 15,000 crore in capital expenditure for its operations in India, the UK, and the Netherlands for the current financial year, with approximately 80% of this amount directed towards ongoing projects in India.
As of March 2025, Tata Steel’s net debt stood at Rs 82,579 crore, down from Rs 88,870 crore in September 2024, marking a reduction of Rs 6,200 crore over the past six months. Additionally, the company is making steady progress on its UK green steel project, with planning approvals secured, technology providers identified, and engineering work nearing completion. Tata Steel, along with its subsidiaries, associates, and joint ventures, employs over 78,000 people globally. The company has set ambitious sustainability goals, including achieving Net Zero by 2045, and is undergoing a multi-year digital transformation to become a leader in ‘Digital Steelmaking’.
Its Jamshedpur, Kalinganagar, and IJmuiden plants have received the World Economic Forum’s Global Lighthouse recognition, and the company has been awarded the ‘Digital Enterprise of India – Steel’ Award 2024 by Economic Times CIO. Tata Steel has also been acknowledged for its commitment to diversity, equity, and inclusion, earning the World Economic Forum’s Global Diversity, Equity & Inclusion Lighthouse 2023 recognition.
A consistent performer on the DJSI Emerging Markets Index since 2012, it has ranked among the top 10 steel companies in the DJSI Corporate Sustainability Assessment since 2016. Tata Steel’s Jamshedpur Plant is India’s first site to receive ResponsibleSteelTM Certification, followed by its Kalinganagar and Meramandali plants, with more than 90% of its steel production in India now coming from ResponsibleSteelTM certified sites.
Tata Steel’s numerous accolades include the Prime Minister’s Trophy for the best performing integrated steel plant for 2016-17, seven consecutive Steel Sustainability Champion recognitions from worldsteel, the 2023 Climate Change Leadership Award by CDP, and recognition as the most valuable mining and metals brand in India in 2024 by Brand Finance. The company has also been recognized with several awards, including the 2023 Global ERM Award of Distinction, ‘Masters of Risk’ at The India Risk Management Awards, and the ICSI Business Responsibility and Sustainability Award 2023.
