News: Tata Steel undertaking a strategic review of its European asset portfolio
Tata Steel, the Indian-owned steelmaker, is undertaking a number of initiatives, including a strategic review of its asset portfolio, as it reports record losses for the last financial year.
Just over 2,000 people are employed at Tata Steel in South Yorkshire and sites including Stocksbridge and Aldwarke specialise in the production of high grade and special steels for the world's leading companies in markets ranging from automotive to aerospace, civil engineering to component manufacturing, energy industries to consumer goods. Narrow strip is produced at Brinsworth.
The latest results filed at Companies House show that Tata Steel Europe reported a record loss of £1.176 billion for the year ending March 31. This compares to a loss of £846m in the previous financial year.
The results were impacted by restructuring and impairment in the value of assets. In May, Tata announced a $1.6 billion writedown on its assets, mainly on the European operations that have suffered from a market slowdown and rising raw material prices since Corus joined the Tata Steel family in April 2007 in a £6 billion transaction.
The speciality steels business is performing well but Tata recently highlighted that "apparent steel demand has fallen significantly in 2012-13 by almost 8% which in aggregate results in almost 30% since the emergence of the global financial crisis in 2007." Conditions are expected to continue over the near and medium term.
Speaking in May, Dr Karl-Ulrich Köhler, MD & CEO of Tata Steel Europe, said: "Europe's economic deterioration last year reversed the modest recovery in European steel demand that had been going on since 2009 and our deliveries fell as a consequence.
"We acted decisively in response to the renewed downturn by focusing intensely on costs and cash flow management. We took £200m of fixed cost out of the business and reduced our steel stocks to record lows by year-end. We also acted to restructure our support functions and asset base.
"We did not allow the downturn to divert us from our longer-term objective of building an all-weather business. We invested significantly in improvements to our operational base and we made substantial progress in strengthening our long-term relationships with end customers in our chosen sectors. And we increased the proportion of high-value, differentiated products and services in our sales, which have risen by almost 20% in the last two years. These improvements have given us a firmer foundation as we enter another tough year of subdued steel demand in Europe."
The accounts also stated that: "In order to maintain its ability to successfully compete in the long term, the group is, therefore, undertaking a number of initiatives, including a strategic review of its asset portfolio."
This will do little to quell rumours from the Indian sub-continent that Tata Steel is planning to sell of some of its UK assets to reduce its debt burden.
The UK management of Tata Steel dismissed the claims, as they did the recent reports that Tata was preparing to close UK research and development facilities on Teesside and in Rotherham over the next 18 months.
Community, the union said that whilst recent performance show some indications of improvement, the situation overall remains of concern to the employees and their families.
Tata Steel Europe website
Images: Tata Steel
Just over 2,000 people are employed at Tata Steel in South Yorkshire and sites including Stocksbridge and Aldwarke specialise in the production of high grade and special steels for the world's leading companies in markets ranging from automotive to aerospace, civil engineering to component manufacturing, energy industries to consumer goods. Narrow strip is produced at Brinsworth.
The latest results filed at Companies House show that Tata Steel Europe reported a record loss of £1.176 billion for the year ending March 31. This compares to a loss of £846m in the previous financial year.
The results were impacted by restructuring and impairment in the value of assets. In May, Tata announced a $1.6 billion writedown on its assets, mainly on the European operations that have suffered from a market slowdown and rising raw material prices since Corus joined the Tata Steel family in April 2007 in a £6 billion transaction.
The speciality steels business is performing well but Tata recently highlighted that "apparent steel demand has fallen significantly in 2012-13 by almost 8% which in aggregate results in almost 30% since the emergence of the global financial crisis in 2007." Conditions are expected to continue over the near and medium term.
Speaking in May, Dr Karl-Ulrich Köhler, MD & CEO of Tata Steel Europe, said: "Europe's economic deterioration last year reversed the modest recovery in European steel demand that had been going on since 2009 and our deliveries fell as a consequence.
"We acted decisively in response to the renewed downturn by focusing intensely on costs and cash flow management. We took £200m of fixed cost out of the business and reduced our steel stocks to record lows by year-end. We also acted to restructure our support functions and asset base.
"We did not allow the downturn to divert us from our longer-term objective of building an all-weather business. We invested significantly in improvements to our operational base and we made substantial progress in strengthening our long-term relationships with end customers in our chosen sectors. And we increased the proportion of high-value, differentiated products and services in our sales, which have risen by almost 20% in the last two years. These improvements have given us a firmer foundation as we enter another tough year of subdued steel demand in Europe."
The accounts also stated that: "In order to maintain its ability to successfully compete in the long term, the group is, therefore, undertaking a number of initiatives, including a strategic review of its asset portfolio."
This will do little to quell rumours from the Indian sub-continent that Tata Steel is planning to sell of some of its UK assets to reduce its debt burden.
The UK management of Tata Steel dismissed the claims, as they did the recent reports that Tata was preparing to close UK research and development facilities on Teesside and in Rotherham over the next 18 months.
Community, the union said that whilst recent performance show some indications of improvement, the situation overall remains of concern to the employees and their families.
Tata Steel Europe website
Images: Tata Steel
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