India's Tata Steel Co. said Monday it would close some of its non-core businesses in the UK, which could result in about 400 jobs being laid off. In a filing with the Indian Stock Exchange, the company said it planned to close its loss-making Orb Electrical Steels in South Wales, potentially affecting up to 380 jobs because the business was "unable to find a way forward".
Tata Steel began selling its five non-core businesses in Europe in May 2018 because it wanted to focus on the main industry of sheet and strip. Orb is an electrical steel manufacturer owned by Cogent, one of the five non-core businesses. Henrik Adam, CEO of Tata Steel Europe, said: "It is unsustainable to continue to fund the huge losses of ORB Electrical Steel Works at a time when the European steel industry is facing great challenges." Adam said that there is no chance that Orb will turn a profit over the next few years. ORB Electrical Steel Works had planned to transform its production of steel for electric vehicles, but it would cost 50 million pounds ($61.39 million) to upgrade the plant.
Unite, Britain's largest trade union said in a statement that it had asked Tata Steel to promise no mandatory layoffs after it announced the closure of Orb. It added that it had signed an agreement to sell Cogent Power, another unit of Cogent, to JFEShoji Trading Company in Japan.
In addition, Tata Steel plans to close another non-core business, the Wolverhampton Engineering Steels Service Center, which has not yet been found to take over. This could affect 26 jobs.
A few weeks ago, Oyak, Turkey's military pension fund, reached an interim agreement to take over British Steel, helping to preserve thousands of jobs in the UK's second-largest steel company. Greybull Capital bought British Steel three years ago for a nominal price of 1 from Tata Steel.
British Steel announced on May 22 that it had entered the compulsory bankruptcy liquidation process because Greybull Capital, the former owner, had not been able to obtain the funds necessary to maintain the company's operations.
