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In yet another restructuring drive, Tata Steel Europe has announced slashing of 900 jobs across its facilities in the UK. At its Port Talbot plant alone, 500 jobs are being cut.
Of the total job cuts in the UK, 580 jobs are being done away with in South Wales followed by 155 in Yorkshire, 120 in the West Midlands and 30 in Teesside. Because of the low demand for steel bars and pipes, the Rotherham and Hartlepool operations will be reduced.
This is not the first time Tata Steel Europe is cutting jobs at its plants. Earlier, it cut jobs at its facilities in Scunthorpe, North Lincolnshire, and IJmuiden, the Netherlands. The company has also shut its facility in Shotton and sold part of Teesside Cast Products (TCP) to Sahaviriya Steel of Thailand for $469 million.
The company said it was making changes at a number of steel finishing and processing sites in the UK that would improve its product and service offering. “These changes would concentrate services at six distribution and processing hubs, which would benefit from £22 million of new investment and new employment, but would also lead to the closure of 12 sites, including Tafarnaubach and Cross Keys in South Wales,” it said.
Karl Ulrich Köhler, managing director and CEO, Tata Steel Europe, said: “Today’s proposals are part of a strategy to transform ourselves into an ‘all-weather’ steel producer, capable of succeeding in difficult economic conditions.
With this restructuring, the company also said it would restart the Blast Furnace 4 at the Port Talbot facility in the first quarter of 2013. The commissioning of the blast furnace will also lead to restarting of its hot strip mill at Llanwern site in Newport, South Wales. The company has spent £250 million to rebuild the blast furnace at Port Talbot.
Köhler said: “The restarting of the Port Talbot furnace will improve our competitiveness and allow us to enjoy the benefits of a modern, state-of-the-art furnace, which, combined with the planned downstream investments, will also enable us to improve customer service. Though slightly delayed because of the current market conditions, restarting the furnace will allow us to return to sustainable production levels.”
The restructuring drive started in 2009 laid out a plan to cut 3,500 jobs in Europe because of the poor economic sentiment and steel demand. Last year, the company had cut 1,500 jobs at Scunthorpe and Teesside plants.
In 2010, Tata Steel Europe mothballed its TCP plant that left 1,600 people jobless. It has also shut its Living Solutions in Shotton, North Wales, cutting 180 more jobs.
In 2009, Tata Steel Europe had cut 4,500 jobs in Europe to battle demand downturn in key markets.
In the second quarter ended September 30, 2012, Tata Steel Europe continued to suffer lower steel prices and demand in Europe. It posted an Ebitda loss of Rs 40 crore in the same quarter.
On November 9, Köhler said, “We are certainly not seeing major improvement in steel consumption this year in Europe.”
The consumption is 25 per cent less than the pre-crisis levels, he said.