West Midlands operations included in Tata Steel sale
TATA Steel, Europe’s second largest steel producer, is poised to sell its Long Products division. The division employs 6,500 across the UK and Europe and has distribution operations at two locations in the West Midlands.
The Indian-owned company said it had signed a Memorandum of Understanding with Geneva-based Klesch Group to undertake detailed due diligence and negotiations for the potential sale.
The MoU covers several UK-based assets including Tata Steel’s Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York, as well as other operations in France and Germany.
There are associated distribution sites which are also set to be part of the potential sale. In addition to bases in Wolverhampton and Stoke, there are located in: Teesside, Scunthorpe (two locations), Newcastle, Edinburgh, Dundee, Mosstodloch, Hull, Dartford, Brandon, Newton Abbot, Lisburn, Northern Ireland, Dublin, Cork and Mülheim, Zwickau, Hamburg and Stuttgart, all Germany.
Karl Koehler, Chief Executive of Tata Steel’s European operations, said: “We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome. We will regularly engage with our employees and other stakeholders throughout this process, and we will consult with the trade union representatives and works councils.”
Explaining the context and rationale for this decision, Koehler said the business was making huge strides towards becoming a premium, customer-centred steel company, largely due to a big investment programme and the hard work of employees.
“We’ve improved the competitiveness of Tata Steel’s European operations, including Long Products Europe which now supplies more of the innovative steel rail, rod, plate, sections and special profile products demanded by customers,” he said.
“Accelerating the pace of innovation on advanced steel solutions, helping our customers succeed in their markets and creating a sustainable asset base requires significant capital and expertise.
“We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies.”
He said the intention was to build a sustainable business in the UK and further develop its mainland European business.
The Long Products business comprises operations in: Scunthorpe (integrated steelworks), Teesside Beam Mill, Lackenby, Special Profiles, Skinningrove & Darlington, Dalzell Plate Mill and Clydebridge, both Scotland, Immingham Bulk Terminal (port terminal), Hayange Rail Mill, north east France, Workington engineering workshop and a rail consultancy in York.
Following the disposal of the Long Products division, Tata would be left with its two other European divisions – stripped products and speciality steel.
The stripped products business makes sheet steel for domestic appliances, the automotive industry and consumer electronics and is based mostly in South Wales and the Midlands. Its speciality steel business in South Yorkshire provides premium products for the automotive and aerospace industries.
