Tata Steel in Britain may close as China dumps goods in EU

     
March 31, 2016

LONDON: Tata Steel's steel plants in Britain have been in the red for a year and the company has now put up its business for sale. Around 15,000 jobs are at stake. The plants may stop work any time without waiting for a prospective buyer.

British Prime Minister David Cameron said on Thursday after a Cabinet meeting that the government would do "everything it can" but said there were "no guarantees of success".

Koushik Chatterjee, a director of Tata Steel, said the crisis has come around mainly because of a sluggish market and cheap Chinese imports. The Mumbai- based company has been losing 1 million pounds ($1.4 million) a day in its UK operations. The shares too have slumped. The UK's European Union membership has prevented corrective measures, industry feels.

Even as the Britons are soon to vote on the country's membership of the European Union in a referendum, the government in order to save thousands of jobs is likely to consider even nationalisation of the steel plants. The voting on June 23 will decide if Britain will stay in the EU or not.

Britain's business minister Sajid Javid said he was seeking investors to take over the assets. However, due to high energy costs and green taxes and cheap Chinese imports, chances of finding a buyer for the company is remote.

Tata Steel bought Anglo-Dutch steelmaker Corus in 2007 for $13 billion before the global meltdown began.

Tata Steel is the second-largest steel producer in Europe. It has a capacity of 18 million tonnes per annum in Europe. Its Port Talbot and Scunthorpe units are in Britain and others in the Netherlands.

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