Tata Steel will close some operations in the United Kingdom, about 400 jobs at stake
BENGALURU Tata Steel Ltd said Monday that it would close parts of its non-core businesses in the United Kingdom, a measure that could cost almost 400 jobs.
The steelmaker proposed closing its Orb Electrical Steels site with losses in South Wales, which could affect up to 380 jobs, as it was unable to find a way forward for the business, she said in a presentation to the stock exchanges.
Tata sold five of its non-core businesses in Europe in May 2018, as it seemed to focus on its strip products business.
Orb is part of one of these businesses, Cogent, which manufactures electric 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.
The company saw no prospects that the business will be profitable again 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 that he had signed an agreement 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 Center, as it did not find a buyer. This could cost up to 26 jobs, he said.
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 placed in mandatory liquidation on May 22 after Greybull Capital was unable to obtain funds to continue its operations.