Tata Steel has announced 400 jobs losses at its steelmaking plant in Port Talbot, Wales, in a cost-cutting move it says will make its UK business competitive in “Europe’s lower market demand era”.
Karl Koehler, Tata Steel’s European chief executive, said in a statement:
We have invested more than £250m over the last two years in state-of-the-art steelmaking technology in the Strip Products business. In addition, we are currently investing in our Hot Strip Mill in Port Talbot and we have upgraded our galvanising line in Llanwern enabling us to increase production of high-value automotive steels.
But steel demand and prices are likely to be under pressure for some years. Our business rates in the UK are much higher than other EU countries’ and our UK energy costs will remain uncompetitive until new mitigation measures come into effect.
The company said it would consult employees, trade unions and its political stakeholders during its restructuring process.
Roy Rickhuss, Chair of the UK trade unions’ steel committee, said:
We recognise the company has been dealing with a long-term downturn in European steel markets for more than five years. However we have also expressed our own concerns about possible undermanning within Strip Products and in Port Talbot in particular.
This news also demonstrates that despite the Government’s trumpeting of economic recovery, the steel sector remains under real pressure.
Tata Steel is Europe’s second largest steel producer, with steelmaking in the UK and Netherlands, and manufacturing plants across Europe.