By Carolina Curiel (ScrapMonster Author)
March 30, 2016 05:31:59 AM
EDGWARE (Scrap Monster): According to reports, Tata Steel is considering to sell its entire UK business in a bid to stem financial losses. The decision was taken during the board meeting held in Mumbai on Tuesday. The company’s UK operations employ nearly 15,000 employees, whose jobs are at stake now.
The company management noted that the financial performance of its UK arm had been deteriorating during the past several years. The drastic fall in steel prices has impacted the company’s financial performance very badly during the past 12 months. Tata Steel believes that the future doesn’t look promising due to escalating manufacturing costs, rising imports from other regions especially Asia and falling demand situation.
Following the board decision, Tata Steel Europe is being advised to explore various options with respect to divestment of Tata Steel UK, in whole or in parts. The European holding company is instructed to evaluate and implement the best feasible solution in a time-bound manner.
The unions have welcomed Tata’s decision not to shut down the plants. They called upon Tata to be a ‘responsible seller’ and requested the UK government to play its role. The opposition Labour Party urged the government to take necessary action to save the nation’s steelmaking industry. Meantime, the government has expressed its willingness to work with Tata in finding a suitable buyer for its UK steel assets.
Tata Steel is the second-largest steel producer in Europe. It has a total crude steel production capacity of over 18 million tonnes per annum in Europe, out of which only 14 million tonnes per annum is operational. Two of its three main units, Port Talbot and Scunthorpe, are in Britain, with the remaining operations in the Netherlands.