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Source: With inputs from PTI.
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Tata Steel announces the closure of UK factory, shares tank
By www.thehindubusinessline.com, 03 Sep. 2019

Last May, the company had announced plans to explore the potential sales of five non-core businesses.

 

Tata Steel Europe has decided to close down its Orb Electrical Steel leading to a loss of 380 jobs.

 

Despite exploring all options, Tata Steel has been unable to find a way forward for Orb Electrical Steels and so proposes to close the site, with the potential loss of up to 380 jobs, said the company in a statement on Tuesday.

 

Last May, it announced plans to explore the potential sale of five non-core businesses, enabling it to strengthen its focus on its strategic markets. Buyers have been found for Kalzip and Firsteel helping to secure 275 jobs.

 

One of the five non-core businesses was Cogent Electrical Steels, which includes Orb Electrical Steels, in Newport, South Wales; Cogent Power Inc, in Burlington, Canada and Surahammars Bruks AB, in Surahammar, Sweden.

 

Tata Steel has signed a sales and purchase agreement for Cogent Power Inc, with Japanese steel giant JFE Shoji Trade Corporation. CPI manufactures cores for electrical distribution transformers and employs nearly 300 people.

 

Furthermore, Tata Steel has decided to retain Surahammars Bruks AB, which makes advanced steels for electric vehicles and employs around 100 people, it said.

 

Henrik Adam, CEO of Tata Steel’s European operations, said: “We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks. However, today’s proposal will be sad news for colleagues at Orb in South Wales. This is necessary, enabling us to focus our resources, including investment, on our core business and markets, helping us build a long-term sustainable future in Europe.”

 

Shares of the company tanked 3.03 percent to Rs 334.50 at the BSE index on Tuesday after the announcement.

 

UK’s steel market

 

Tata Steel is the largest steelmaker in the UK employing more than 8,000 people, manufacturing advanced products for the likes of the automotive, construction and engineering industries.

 

The company has invested around 2 billion pounds in its UK business since acquiring Corus in 2007, including more than 100 million pounds in the last year to support advanced steel manufacturing at a number of UK sites including an essential life extension project at one of the company’s two UK blast furnaces.

 

Unions said Tata — which employs nearly 6,000 workers in Wales — was breaking its commitments over job guarantees.

 

Roy Rickhuss of the Community steelworkers’ union called it “shocking” news, which “makes a mockery of the understanding we reached with Tata around the jobs guarantee“.

 

“There has been no consultation about this proposal either at UK or European level and company management should hang their heads in shame in the way this has come about,” said Rickhuss.

 

“This is of course extremely devastating news for workers at the Orb, but all Tata Steelworkers should be concerned by the way Tata is breaking its commitments,” he said, calling on the UK government to intervene.

UK Economy Minister Ken Skates said he stressed the importance in talks with the company of avoiding compulsory redundancies.

 

“The Welsh government will now do everything it can to support individuals, the community and the supply chain affected by this announcement,” he added.

 

“Today’s news clearly demonstrates the fragility of the global steel market and the UK government must now step up and broaden its approach to supporting the industry, including its supply chain, across the whole of the UK,” Skates said.