The Tata Steel Port Talbot steel production plant can be seen in Port Talbot, Wales, UK. File Photo | Photo source: REUTERS
The job loss of around 2,500 workers at Tata Steel’s UK operations, which are in the transition phase, is “inevitable”, said the company’s chief executive TV Narendran.
The fear of job loss has been criticized by trade unions, which continually protest against the company in the UK
Indian company Tata Steel owns the UK’s largest steelworks with a capacity of 3 million tonnes per annum (MTPA) in Port Talbot, South Wales, and employs around 8,000 people across its plants in the country.
As part of its decarbonization plan, the company is transitioning to a low-emission electric arc furnace (EAF) blast furnace (BF) process that is nearing the end of its life cycle.
T.V. Narendran, CEO, Tata Steel. File | Photo source: REUTERS
I am talking with PTIMr Narendran said the switch to EAF with UK Government support would make the company competitive in terms of reduced production costs and also facilitate reduce Co2 emissions by 5 million tonnes per year.
“But all this involves the loss of 2,500 jobs and, of course, trade unionists are not satisfied with this. And there is an ongoing conversation with the unions about how we can do this as efficiently as possible. It is inevitable,” he said.
In September 2023, Tata Steel and the UK Government agreed a joint £1.25 billion investment plan to deliver decarbonisation plans at its Port Talbot steelworks in the UK.
Of the £1.25 billion, £500 million was provided by the UK government.
Sharing an update on the UK operations, Mr. Narendran further said that the coke ovens were already closed in March. One blast furnace will be closed in June due to operational difficulties, while the second blast furnace will be closed in September due to asset quality reasons and also due to financial problems.
“We want to switch to EAF production because the UK has a lot of steel scrap. It is one of the few countries that are a enormous exporter of steel scrap. It therefore makes sense to exploit scrap available in the UK to produce steel in the UK and sell it to UK customers, compared to importing iron ore and coal from around the world.
“Making steel through the EAF process will make Tata Steel competitive by at least $150 per tonne. “So the UK business, which has traditionally been loss-making for the company, can become EBITDA positive and cash neutral once this transition is complete,” he said.
As the CEO said earlier, Tata Steel aims to complete decarbonization at its UK plant within the next three years.
Annual revenues from the UK operations were £2,706 million and the EBITDA loss was £364 million. For the January-March quarter, revenues were £647 million and the EBITDA loss was £34 million.
Tata Steel on Wednesday reported a 64.59% decline in consolidated net profit to ₹554.56 crore for the January-March 2023-24 quarter on lower realizations and lower expenses on some unique items.
Last year, the steel parent company posted a profit of ₹ 1,566.24 crore.
