Tata Steel completes UK business move
Hundreds of Tata Steel workers on Teesside in the north-east of England will effectively come under new management with the latest development. The new Scunthorpe-based business, which employs 750 workers, will be led by Bimlendra Jha, executive chairman of the Tata Steel board.
August 05, 2015 / 09:39 PM IST
Tata Steel has completed the move of incorporating its Long Products Europe (LPE) division into a new standalone wholly-owned subsidiary within its European operations to create a sustainable future.
Hundreds of Tata Steel workers on Teesside in the north-east of England will effectively come under new management with the latest development.
The new Scunthorpe-based business, which employs 750 workers, will be led by Bimlendra Jha, executive chairman of the Tata Steel board.
"The move brings together the existing long products businesses with its associated distribution facilities. It will allow the business to combine the strength of Tata Steel with a flexible and more focused operational approach. It will also enable strategic options to be progressed," a Tata Steel spokesperson said.
Jha, who replaces Jon Bolton, will draw on his experience of running Tata Steel's India-based long products business and his successful business improvement experience at the company's Jamshedpur steelworks, the company said.
The news came as it emerged that Anglo-American industrialist Gary Klesch has abandoned his plans to buy the LPE plant, citing rising energy costs and Chinese imports as ruining the UK steel industry.
An independent report commissioned by workers' unions had claimed creating a standalone business would be the best option for Tata's LPE division.
"As the key recommendation from the Syndex report into the future of Long Products, we welcome the creation of the stand-alone business and look forward to working with Jha and his team to create a sustainable future for long product steel production in the UK," a spokesperson for the Community union said.
"Having worked closely with Jon Bolton over a number of years, we wish him all the best as he leaves the business," Tata Steel, which employs 1,500 overall on Teesside, announced last month it would shed 25 jobs at its Skinningrove plant after a drop in customer orders.
Earlier, it had announced plans to cut hundreds of jobs at the company's Rotherham site in the Midlands.
Sources, however, told CNBC-TV18 that Tata is likely to begin an informal bidding process soon to sell the LPE business and that the group believes that the sale is is key to its Europe deleveraging plans.