The company saw no prospects of the business returning to profitability in the coming years. The news comes weeks after Turkey’s military pension fund OYAK reached a provisional agreement to take over British Steel.
India’s Tata Steel Ltd said on August 2, it would shut some parts of its non-core businesses in the UK, a move that could cost about 400 jobs.
The company proposed to close its loss-making Orb Electrical Steels site in South Wales, potentially affecting up to 380 jobs, as it was “unable to find a way forward” for the business.it said in a filing to Indian stock exchanges.
The closure of Tata Steel’s Newport plant means hundreds of job losses in our steel industry.— Jeremy Corbyn (@jeremycorbyn) September 2, 2019
The Tories’ reckless No Deal policy is hammering manufacturing.
The government must work with steel unions and industry to implement an emergency strategy for the sector.
In May 2018, Tata had put up five of its non-core businesses in Europe on sale as it looked to focus on its strip products business.
“Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges,” said Henrik Adam, chief executive officer of Tata Steel’s European operations.
The company saw no prospects of the business returning to profitability in the coming years, Adam said.
Tata Steel said it would cost us more than 50 million pounds ($61.39 million) to upgrade the site to produce steel for electric vehicle production.
Unite, UK’s largest trade union, said in a statement it has sought assurances that there would be no compulsory redundancies from Tata Steel after the steelmaker announced Orb’s closure.
Tony Brady, Unite officer for Tata Steel, said in a statement: “The closure of the Orb electrical steel base in Newport is yet another blow for the economy of Wales.
Tata Steel is in the midst of a transformation programme to make the European business, split between the UK and the Netherlands, cash flow positive, after the planned joint venture with Thyssenkrupp fell through. https://t.co/XDz929gQVV— The Telegraph (@ttindia) September 3, 2019
Unite will be fighting for every job and holding Tata Steel’s feet to the fire over assurances that workers affected will be redeployed, he added.
Tata Steel, the largest steelmaker in the UK employing more than 8,000 people, has invested £2 billion in its UK business since acquiring Corus in 2007, including more than £100 million in the last year to upgrade and maintenance.
Tata Steel to sell Cogent Power
Most importantly, Tata Steel added it had signed a deal to sell Cogent Power, another division of Cogent, to Japan’s JFE Shoji Trade Corp.
On the other hand, it also plans to close another non-core business, Wolverhampton Engineering Steels Service Centre, as it did not find a buyer. This could cost up to 26 jobs, it said.
However, the news comes weeks after Turkey’s military pension fund OYAK reached a provisional agreement to take over British Steel, which Greybull Capital bought from Tata Steel 3 years ago, potentially saving thousands of jobs.
On May 22, British Steel was put into compulsory liquidation after Greybull Capital failed to secure funding to continue its operations.