Business Today
Loading...

Tata Steel to shut some operations in UK, 400 jobs at stake

The steelmaker 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

twitter-logo Reuters        Last Updated: September 2, 2019  | 19:00 IST
Tata Steel to shut some operations in UK, 400 jobs at stake

The Tata Steel Ltd said on Monday it would shut parts of its non-core businesses in the United Kingdom, a move that could cost about 400 jobs.

The steelmaker 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.

Tata put up five of its non-core businesses in Europe on sale in May 2018 as it looked to focus on its strip products business.

Orb is part of one of these businesses, Cogent, which makes electrical steels.

"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.

ALSO READ:What ails Tata Motors share price? Rs 1 lakh investment reduced to Rs 22,000 in three years

The company saw no prospects of the business returning to profitability in the coming years, Adam said.

Tata Steel said it would cost the company 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.

Tata added it had signed a deal to sell Cogent Power, another division of Cogent, to Japan's JFE Shoji Trade Corp.

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.

ALSO READ:Tata Steel to cut capex to Rs 8,000 crore in FY20 amid slowdown

The news comes weeks after Turkey's military pension fund OYAK reached a provisional agreement to take over British Steel, which Greybull Capital bought for one pound from Tata Steel three years ago, potentially saving thousands of jobs.

British Steel was put into compulsory liquidation on May 22 after Greybull Capital failed to secure funding to continue its operations.

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close