Manufacturing Biz #2 - Magazine - Page 19
T
ata Steel announced earlier this
year it will commence statutory
consultation as part of its plan to
transform and restructure its UK business.
Up to 2,800 employees are expected to be
potentially affected, out of which around
2,500 roles would be impacted in the next
18 months with the closure of both blasts
furnaces at Port Talbot.
Tata say the plan is intended to reverse
more than a decade of losses and
transition from the legacy blast furnaces to
a more sustainable, green steel business.
The transformation would secure most of
Tata Steel UK’s existing product capability
and maintain the country’s self-sufficiency
in steelmaking, while also reducing Tata
Steel UK’s CO2 emissions by 5 million
tonnes per year and overall UK country
emissions by about 1.5%.
Port Talbot’s two high-emission blast
furnaces and coke ovens will close in
a phased manner with the first blast
furnace closing around mid-2024 and
the remaining heavy end assets would
wind down during the second half of
2024. The proposal also includes a wider
restructuring of other locations and
functions across the company, including
the intended closure of the Continuous
Annealing Processing Line (CAPL) in March
2025.
Tata Steel has agreed that it would
continue to operate the hot strip mill
through the proposed transition period
and in future. In addition, the downstream
and steel processing centres would
continue to serve customers by utilising
imported semi-finished steel from Tata
Steel plants in the Netherlands and India
as well as other select strategic suppliers
The proposal is supported by the UK
Government, which has committed up to
£500 million to enable the transformation.
Tata Steel plans to invest £750 million
in the project, alongside funding for a
comprehensive support package for
affected employees, business restructuring
and transition costs as part of its long-term
commitment to UK production.
In discussions with the UK Steel
Committee, Tata Steel has agreed to revise
its proposal and would continue to operate
the Port Talbot hot strip mill throughout
the transition period and in future. It has
also carefully considered the committee’s
endorsed proposal for partial continuity
of blast furnace steelmaking assets
until Electric Arc Furnace facilities are
commissioned in Port Talbot.
As part of the review of the endorsed
proposals, Tata Steel commissioned
independent engineering studies and
analysis of alternative-scenarios which
concluded that continued blast furnace
production while constructing the new
Electric Arc Furnace is not feasible due to
the following:
- The projected operating costs of such a
configuration are financially unaffordable
- Building the Electric Arc Furnace in an
already operating steel melt shop would be
fraught with risk, significantly increasing
costs, creating a sub-optimal plant layout,
delaying implementation of the plan
and jeopardising the proposed business
transformation programme
- The near end-of-life condition and
deteriorating operating performance of
several heavy end assets in Port Talbot
T V Narendran, Tata Steel’s Chief Executive
Officer and Managing Director, said: “The
course we are putting forward is difficult,
but we believe it is the right one. Having
invested almost £5 billion1 in the UK
business since 2007, we must transform at
pace to build a sustainable business in the
UK for the long-term. Our ambitious plan
includes the largest capital expenditure in
UK steel production in more than a decade,
guaranteeing long-term, high-quality steel
production in the UK and transforming
the Port Talbot facility into one of Europe’s
premier centres for green steelmaking.
“We recognise this proposed restructuring
would have a major impact on the
individuals and communities concerned,
whom we will support with dignity
and respect. In consultation with our
union partners, Tata Steel will offer a
comprehensive support package to
mitigate the impact of any anticipated job
losses, including helping employees to
retrain and find new jobs.
"We will continue our work with the UK
and Welsh governments, trade unions and
the community to help those who may be
affected through the proposed transition.”
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