India's Tata Steel to invest $645 mln in Europe

India's Tata Steel plans to invest $645 million in its European unit, a company official said on Thursday, as it battles slowing demand. "We will invest 400 million pounds ($645 million) in 2012-13," Tata Steel's managing director H.M. Nerurkar told reporters on the sidelines of an industry conference in New Delhi. "We plan to invest to improve the performance of operations in Europe and in areas which can provide quick returns." The investments will be partly funded from internal resources, Nerurkar said, adding the funding process is still to be finalised. Europe accounts for around two-thirds of sales and production for the Indian steelmaker, which has an annual capacity of 28 million tonnes. Tata Steel, part of the sprawling Tata Group conglomerate, became one of the world's biggest steelmakers after buying Anglo-Dutch company Corus for $13.7 billion in 2007. Corus was rebranded as Tata Steel Europe in September 2010. It has shown weak earnings growth in the past few quarters, hit by a slowdown in industrial activity and weakening demand for steel in the region. It has also laid off hundreds of workers since being taken over and sold one of its British plants to cut costs. Steelmakers around the world have been suffering from a demand downturn as industrial growth loses pace in emerging economies such as India and China and expansion remains sluggish in advanced western economies. Nerurkar said demand for steel remained weak in Europe but voiced hope that the situation may improve thanks to efforts by European governments to solve the financial crisis.