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.
