Private steel major Tata Steel will focus more on improving productivity rather than retrenching its workforce in view of the prevailing slump in the global steel sector.

"In view of the slump in steel sector across the world, we have initiated steps to address the challenges and launched ‘Sikhar 25’ campaign to involve employees and officials to enhance productivity in respective areas," Tata Steel vice-president (HRM), Suresh Dutt Tripathy said.

Interacting with reporters here on Tuesday, Tripathy said the steel sector was passing through a bad phase due to demand- supply gap and one of the major cause behind it was dumping of steel by China at less than the cost of the production here.

"The country is producing 80 million tons of steel as against the capacity of 110 to 115 million tons, but China is producing 840 tons of steel against their capacity of 1,200 million tons per annum," he said, adding that out of the 840 million tons, steel consumption of China was 720 million tons, leaving 120 million tons surplus.

"Currently, the slump in demand of steel as well as prices was witnessed across the world, which led several steel companies to cut salaries of their employees or adopt austerity measures," Tripathy said.

Asked if Tata Steel had any plans to reduce workforce due to prevailing slump in demand, Tripathy said the company has no such plans.

"We can not retrench our employees as per an agreement the company had signed with its workers’ union in 1956," he said.