UK drags Tata Steel to a loss in Europe
Tata Steel's European operations, including the UK, have slumped to a loss as it struggles to compete against cheap Chinese imports and weak demand from industry, new figures reveal.
It also blamed the strength of sterling and "adverse regulatory and business conditions" as turnover in the three months to September fell to £1.7 billion from £2 billion a year ago.
The company said a sharp downturn in market conditions hit performance in the UK as the company unveiled a loss of £23 million over the three months in Europe.
The struggling company announced two weeks ago it was axing another 1,200 jobs, mostly in Scunthorpe. It cut 250 jobs in August, mothballing a plant in South Wales and cutting 35 jobs at a site in Wednesbury.
The company employs around 600 people in the Black Country, most of them at its major distribution site at the Wednesfield Steelpark as well as in Brierley Hill and Walsall.
Another 2,200 jobs have been lost with the closure of SSI mill at Redcar, bought from Tata in 2011, as crisis grips the UK steel industry.
Tata Steel's European boss, Karl-Ulrich Köhler, said: "Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness.
"We have made three restructuring announcements in the UK since July leading to reduced volume and costs. We are working with the UK government to urgently secure a more competitive trade and regulatory environment and we will support our employees affected by restructuring. We are also continuing to assess all the strategic options for our Long Products business.
"Across Europe we are calling on governments to ensure the European Commission upholds international trade rules firmly and more speedily. Surging volumes of dumped imports, including from countries that subsidise their steelmakers, are massively distorting competition."
The European figures proved drag on Indian-based Tata Steel's overall figures, with group turnover down to £5.9bn from £7.2bn a year ago and, despite a 22% rise in profits over the last three months, its pre-tax profit for the first half of its financial year down more than £80m to £302m.
