Steel manufacturer Tata Steel is to shed up 1,500 jobs following a drop in demand but will invest £400M in its Long Products devisions.
With demand for structural steel only two thirds of the 2007 level and is not expected to fully recover within the next five years, the firm plans to close or mothball parts of the Scunthorpe plant. This puts at risk 1,200 jobs at Scunthorpe and 300 jobs at its Teesside sites.
However, the firm is proposing a restructuring of its Long Products business to target high-value markets and introduce greater flexibility into its costs and operations. To support this strategy, Tata Steel plans to invest £400M over a five-year period.
“We are proposing to take these actions only after going through an inclusive consultative process that involved very careful scrutiny of the Long Products business performance,” said Tata Steel Europe’s managing director Karl-Ulrich Köhler.
“We have used the experience we gained in turning around our Speciality Steels business in developing this strategy for the rest of Long Products and we are convinced it represents the best chance of making this business successful and sustainable in the long term.”
“Tata Steel is showing its commitment to making this strategy work by earmarking £400M of investment for this business over the next five years.”