Tata Steel set to sell Long Products business

TATA Steel is planning to sell of its Long Products division, which employs more than 6,000 people in the UK.

The steel giant has signed an agreement with global industrial firm, the Klesch Group, which is headquartered in Geneva, Switzerland. 
 
The Memorandum of Understanding agreement, formalising Tata’s intention to agree a sale, covers several UK-based assets including a rail consultancy in York, Tata Steel’s Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland and an engineering workshop in Workington, as well as other operations in France and Germany.

The company’s sheet and speciality steel operations in South Yorkshire and South Wales are unaffected.

About 6,500 people are employed at Long Products Europe and its distribution facilities. The division manufactures transport rails and steel sections for use in construction, heavy industry and excavation.

Tata Steel employs 30,500 people across Europe, including 17,500 in the UK. 
 
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.”
 
Koehler said Tata is making “huge strides” on its strategic journey to become a premium, customer-centred steel company thanks to investment in equipment, technology and customers, together with the substantial contributions from 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.
 
“We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that.”

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.