Tata Steel plans to mothball a facility in the UK

Tata Steel (Tata Steel Limited), the largest steel producer in the UK, has announced its intention to mothball its South Wales plant as conditions remain tough in the global and domestic steel markets, forcing the company to focus on higher value products.

Tata Steel, the second largest steelmaker in Europe after Arcelor Mittal, said it will redeploy employees at its Llanwern, Newport plant, which manufactures products used in construction, automobiles, household goods and packaging. However, the British press reported that the company is going to cut 250 jobs as a result of the shutdown of the plant.

This move is only possible in a month, according to Tata Steel. At the same time, the company has already reported that it could cut about 720 UK jobs, mainly in Rotherham in northern England, reshaping its rebar business, which has been hit hard by cheap domestic imports and high energy prices.

“In the past year, we have also taken steps to make positive improvements in our operations,” said Stuart Wilkie, director of product sales for Tata Steel in the UK, in a statement. “But imports are on the rise and are often trading at unfair prices, which, combined with the strong pound, creates a very difficult business environment,” Wilkie added.

Tata Steel has been forced to cut labor costs since 2007, when it bought the Anglo-Dutch manufacturer Corus for $ 13 billion. It now employs about 17,000 people, far less than the 25,000 employed in 2008.

The UK steel sector has contracted sharply in recent years amid problems such as poor demand growth since the financial crisis, overcapacity, high labor and energy costs, which have recently been exacerbated by rising imports and the strengthening of the British currency.