Tata Steel to Take a Call on UK Plant in 2024

SEATTLE (Scrap Monster): Tata Steel would have to decide on the future of its UK operations within the next year as some assets are nearing the end of their operational life, managing director, TV Narendran told Economic Times. 

Noting that the government has also visited their sites, Narendran says "Hopefully, we will come to a conclusion in the next few months."

Elaborating further, he cited that negotiations got delayed over the past two-three years due to multiple governments coming to power. "But now, the government is very keen to take it to a logical end," Narendran said adding, "The final call has to be taken within the next year."

Tata Steel, which acquired the British-Dutch Corus Group in 2007, operates the UK's largest steel plant and seeks fiscal support from the British government for transitioning to cleaner steelmaking technology. The company cites high operational costs impacting profitability and necessitating government assistance for modernisation.

Tata Steel UK reported a loss in Q1 due to declining demand and prices with elevated input costs. The management plans to meet British PM Rishi Sunak in September to discuss fiscal stimulus for the UK plant, expecting improved performance in the latter half from better realizations and lower energy costs, ET had reported earlier. 

Tata Steel's Dutch plant faced production setbacks and financial strain in the April-June period as one of its blast furnaces underwent maintenance. The Netherlands unit, a profit leader in Tata Steel's European business, was affected, and the European operations are expected to remain under pressure in the current quarter. 

The Dutch blast furnace is projected to resume operations only from November this year, but a turnaround in European operations is anticipated after that, according to Narendran. 

Tata Steel Ltd. reported a 92% decline in quarterly profit as it continues to grapple with weakness in its European operations despite better performance at its Indian business.

Group net income was 6.34 billion rupees ($78 million) during April-June, down from 77.65 billion rupees a year earlier, it said in a statement Monday. That was better than analysts’ average estimate for a loss of 2.18 billion rupees. Sales fell 6.2% from a year earlier to 594.9 billion rupees.

Courtesy: www.livemint.com