Tata Steel to shut two sites in the UK

For some time now, Tata Steel has been trying to sell some of its non-core businesses. While Kalzip and Firsteel were successfully sold, offering security to 275 employees, the remaining businesses still have an uncertain future. Therefore, two sites may be closed down in the UK, which will affect about 400 employees.

Recently, the Company struck a deal with Japanese steel giant, JFE Shoji Trade Corporate, for Cogent Power Inc (CPI), which is part of Cogent Electrical Steels, one of its five non-core businesses. CPI manufactures cores for electrical distribution transformers and has almost 300 employees on its rolls.

Cogent Electrical Steels comprises Orb Electrical Steels in Newport South Wales and Surahammars Bruks AB in Sweden, and CPI in Burlington, Canada.

While Tata Steel will be keeping Surahammars Bruks AB, manufacturer of advanced steels for electric vehicles and employer of a 100 strong workforce, it has not been able to work out a plan for Orb Electrical Steels. Therefore, it is most likely to shut down the site, which will render about 380 workers jobless.

For the past several years, the Orb Electrical Steels business has been incurring losses and not been performing well as a supplier of steel to the electricity transformers space, where the demand has hiked beyond the ability of the site to handle. To enhance its capability, and make it fit to cater to the e-vehicle production sector, will mean huge investments of more than £50 million. And this would not be feasible, especially when the steel sector in Europe is facing challenges.

The positive thing is that 400 jobs have been secured in CPI and Surahammars Bruks.

However, the trade unions in the UK are not taking this lightly and have conveyed their intention to fight for the jobs.

Having failed to find a buyer for Wolverhampton Engineering Steels Service Centre in the UK, Tata Steel is considering shutting that too. This will affect another 26 jobs.