Tata Steel to sell UK operation to Klesch Group
Indian steel manufacturer plans to sell its loss-making Long Products Division
Tata Steel will potentially sell its Long Products Division, which includes the Scunthorpe steelworks (pictured above).
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India’s Tata Steel is in talks with Geneva-based Klesch Group to potentially sell its Long Products Europe division, the company has announced.
The Indian steel giant has signed an MoU with Klesch Group for “potential sale” of the operation, which has 6,500 employees in the UK and Europe.
The Long Products Division supplies rod, rails, and plates for the construction industry. It was reportedly running on losses, as it struggled with weak prices and uncertain economic recovery, according to Reuters.
The agreement covers many of Tata Steel’s assets in the UK including its Scunthorpe steelworks, mills in Scotland, a workshop in Workington, and a rail consultancy in York. Operations in France and Germany are also covered in the memorandum.
Commenting on the decision, Karl Koehler, chief executive of Tata Steel’s European operations, said that the company would be focusing on its strip products activities, where it has “greater cross-European production and technological synergies.”
“Accelerating the pace of innovation on advanced steel solutions…requires significant capital and expertise. We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that,” Koehler said.
