Josh Phillips – Tata Steel Losses

Josh Phillips - Tata Steel Losses

The European arm’s loss for the year to 31 March 2016 was in stark contrast to the £435m profiit posted in its previous results.

Turnover for the division was down by 15.3 per cent over the same period, falling to £6.87bn from £8.11bn the year before.

Chief executive Hans Fischer said demand in Europe was “undermined by continued surging imports in 2015”.

He said imports “rose so fast that domestic deliveries declined, and prices came under further pressure”.

He added that it was “vital” the European Commission and national governments continued to “strengthen action against unfair trade”.

Tata said its board was “actively reviewing all options” for its UK businesses, including a potential sale.

Its UK arm has already agreed to sell its Long Proucts Europe business to Greybull Capital, which will be completed once contracts are transferred and “certain government approvals” are met.

In January this year, Tata Steel UK axed 750 staff at its Port Talbot-based Strip Products UK business, with 200 support jobs and a further 100 jobs at steel mills in Trostre, Corby and Hartlepool also cut.

It also announced it would axe 1,200 jobs at its Scunthorpe plant in October last year, but these jobs could potentially be saved once the sale to Greybull Capital is completed.

The company is shifting its output to focus on higher-value sales and differentiated products, which now make up over a third of total sales.

In the UK, the firm said it would be focusing on “higher-value sales rather than volume”.

Liquid steel production across Europe stood at 3.41m tonnes, down from 3.91m tonnes in its previous results, while deliveries fell to 3.55m tonnes, down from 3.81m tonnes over the same period

In April, business secretary Sajid Javid announced that the government would provide debt financing, or take up to 25 per cent of Tata Steel UK, to encourage “a credible private buyer” to come forward, a move welcomed by the steel industry.

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Josh Phillips - Tata Steel Losses
BDC July 2022 issue - 294

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