Tata Steel UK to abandon production at Wales plant, shift workers

Tata Steel, Britain's largest steelmaker, said on Wednesday it will curtail production at its plant in South Wales to high-value products and temporarily stop some coil processing facilities, including the sibling hot strip mill at Llanwern, Newport in a bid to cut costs and stay afloat.

Tata Steel employees at the Llanwern mill will be redeployed within the business and the company will discuss possible impacts with contracting companies which provide services.

The company said it will concentrate UK production of hot rolled coil at its upgraded hot strip mill in Port Talbot, which ensures quality and capacity and uses recovered energy sources from the steelworks.

The production facilities at Llanwern, however, will be retained so they can be restarted in more favourable market conditions while workers will be deployed elsewhere, Tata Steel Europe said.

Europe's second-largest steelmaker after Arcelor Mittal, makes strip products used in autos, construction, domestic goods and packaging at the Llanwern plant.

Press reports, meanwhile, said the company will cut 250 jobs.

The move comes a month after Tata Steel said it may cut up to 720 UK jobs, mainly at Rotherham in northern England, as it revamps the speciality and bar business, which has been hit by cheap imports and high energy costs.

"In the past year, we have also been making positive improvements to our manufacturing capability," Stuart Wilkie, director of Tata Steel's Strip Products UK business, said in a statement on Wednesday.

''Tata Steel has invested upwards of £350 million to improve the steel industry in Wales in the past five years. In the teeth of a recession we rebuilt a blast furnace, improved the Port Talbot hot strip mill and upgraded the capabilities of our world-class galvanising line at Llanwern. We also built new steel processing technology at Llanwern – a site which will continue to specialise in finishing and distributing our steel products,'' Wilkie said.

"But surging, and often unfairly traded, imports have combined with a strong pound to create a very challenging business environment," Wilkie added.

Tata Steel has been forced to slash costs and jobs since 2007 when it bought Anglo Dutch producer Corus for $13 billion. It now employs around 17,000 people against some 25,000 in 2008.