Tata Steel to axe 1,050 UK jobs as steel crisis simmers

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Mumbai/london | January 18, 2016 8:07 PM

Tata Steel Ltd said on Monday it would axe 1,050 jobs in Britain, a further blow for the beleaguered steel industry as it reels from falling European steel prices driven by a flood of cheap imports, mainly from China.

Tata steelTata Steel took a non-cash charge in the quarter to end-September totalling 87 billion Indian rupees ($1.3 billion), mostly due to losses at its British business.    (Express photo)

Tata Steel Ltd  said on Monday it would axe 1,050 jobs in Britain, a further blow for the beleaguered steel industry as it reels from falling European steel prices driven by a flood of cheap imports, mainly from China.

The plan involves shedding 750 jobs at Tata’s Port Talbot-based strip products business in Wales, 200 jobs in support functions and 100 jobs at steel mills around the country, the company said in a statement.

The announcement from Britain’s biggest steelmaker comes amid decade-low steel prices & lt;ST-CRU-IDX> as the industry struggles to cope with a record amount of Chinese imports. Some 4,000 jobs were lost in October alone, equivalent to about a fifth of Britain’s steel workforce.

“We need the European Commission to accelerate its response to unfairly traded imports and increase the robustness of its actions,” said Karl Koehler, chief executive of Tata Steel’s European operations.

“Not doing so threatens the future of the entire European steel industry,” he said. “We now need all stakeholders to do their utmost to meet the unprecedented challenges the steel sector is facing.”

British steelmakers pay some of the highest energy costs and green taxes in the world and business rates up to 10 times higher than their EU counterparts.

The Port Talbot operation, which employs some 4,000 people, is expected to report annual losses above £60 million ($86 million) by the end of March 2016, an industry source told Reuters. A separate source said the company had not yet approached restructuring advisors.

Tata Steel took a non-cash charge in the quarter to end-September totalling 87 billion Indian rupees ($1.3 billion), mostly due to losses at its British business.

“We have been dealing for some time with a toxic cocktail of conditions … a strong and rapid response in the UK and in Brussels is required,” said Gareth Stace, director of UK Steel, an industry body.

“(Port Talbot) is a site of critical importance to our national industrial infrastructure. The government’s review of business rates could significantly reduce the multi-million-pound bill the plant has to pay,” he added.

British Business Minister Anna Soubry said: “The government has taken clear action to help the industry, through cutting energy costs, taking action on imports, government procurement and EU emissions regulations.”

But the future of Britain’s steel sector is still not secure, said a government report published in December.

Tata Steel, a unit of India’s diversified Tata conglomerate,  has slashed costs and cut thousands of jobs since buying Anglo-Dutch producer Corus in 2007.     ($1 = 0.6990 pounds)  ($1 = 67.6578 Indian rupees)

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