"Tata Steel's operations in India are expected to remain strong, its operations in Europe will continue to be under enormous stress for the next year or two until the Western European economy recovers," Tata said in the company's annual report.
Tata Steel, which is the among the top 10 steel makers in the world with over 28 million tonnes (MT) a year capacity, had produced 14.27 MT in Europe in 2011-12, down from 14.80 MT in the previous year.
"The unprecedented rise in iron ore and coking coal prices coupled with the acute decline in market demand will continue to negatively impact company's European operations," Tata said, adding that to reduce costs, the company has already started restructuring and capacity rationalising process.
The European operations of the company were particularly impacted in the second and the third quarter of the last financial year due to high raw material costs.
On expansions in India, Tata said, "Tata Steel's 2.9 MT expansion in Jamshedpur is expected to go onstream during the financial year 2012-13, taking Jamshedpur's capacity to 9.7 MT per annum."
The new six MT per annum greenfield steel plant in Odisha is under construction and, subject to essential captive mining approvals from the government, the first phase of three MT is scheduled to commence in 2014, he added.
"Therefore, Tata Steel by 2014, would have a global steel capacity of 33.5 MT, and will add a further three MT on the full implementation of the Odisha project," Tata said.