Tata in talks to retain Shotton Steel in joint venture move

Tata Steel has said it has put on hold the sale of its Port Talbot steelworks and related ‘downstream’ sites which include Shotton.

The Mumbai-based company says it’s looking to form a joint venture with ‘strategic players’ in the steel industry, including German based ThyssenKrupp AG.

Tata has cited uncertainty caused by the Brexit vote and surrounding pension liabilities, the announcement has however created even more uncertainty for its UK workforce.

Seven potential buyers had been shortlisted by Tata to take over its ailing UK steel business, the legacy of the 130,000 member British steel pension fund which Tata inherited in 2007 when they bought the business has been seen as a major problem for would-be buyers.

Germany’s biggest steelmaker Thyssenkrupp has said it wants to play a role in any consolidation of the European steel market, which is saddled with excess production capacity and a weak demand outlook.

Tata Steel will begin separate sales processes for its Speciality Steels business which includes plants in Hartlepool, Rotherham and Stocksbridge.

Liberty House, the UK-based steel  firm headed up by Sanjeev Gupta are believed to be favourites to snap up.

Brexit-induced uncertainty and a sharp fall in the pound has set nerves jangling in Mumbai as investors warn the UK economy could tip into recession, hammering consumer and business confidence.

The steel giant is coming under increased criticism around the sales process with one Union official telling Deeside.com: “it [the sales process] is looking more and more like a huge game of corporate game of poker.”

Hans Fischer, Chief Executive Officer of Tata Steel Europe, commented:

“This is a welcome development, not just for Tata Steel but also for the European steel sector more broadly.

Although there’s much work still to be done on any strategic collaboration I’m confident that the direction is the right one – towards higher performance and capability to serve customers.

We will continue to communicate with our employees and inform and consult both works councils and trade unions as these discussions develop.”

Cast iron commitments

Britain’s largest union, Unite called for ‘cast iron’ commitments following today’s announcement (Friday 8 July) by Tata Steel to retain Port Talbot and its strips business while pressing ahead with a separate sale of its speciality steel business and tubes operation.

Reminding Tata of its promise to be a responsible seller, Unite said it would seek to engage positively with prospective buyers of Tata’s speciality steel and tubes business.

Cautioning that the ‘devil would be in the detail’ the union said it would be pressing Tata for further detail on today’s announcement and guarantees over its long-term commitment to Port Talbot and its strips business.

Unite national officer Harish Patel said:

“It has been a desperately uncertain time for steelworkers and their families, who will no doubt have many questions about what this announcement means for them and their industry.

“Workers in Tata Steel’s strips business which includes Port Talbot will want to know precisely what the steelmaker’s long-term plans are, while those in the speciality and tubes division will want the assurance that Tata will sell to a responsible buyer.

Roy Rickhuss, General Secretary of the steelworkers’ union, Community, said:

“I have been in direct contact with senior Tata executives at the board meeting in Mumbai. This follows conversations I had with senior government ministers yesterday.

Tata have outlined the situation following their board meeting.

Tata is now in dialogue with Thyssenkrupp regarding its strip products division and connected downstream operations.

They also explained that the speciality business in Stocksbridge and Rotherham as well as two of its three tube mills in Hartlepool will now be sold separately.

However, the current status of the sales process is unclear and this will be frustrating for our members, and perhaps even the bidders.

However, the current status of the sales process is unclear and this will be frustrating for our members, and perhaps even the bidders.

“This new approach means that uncertainty will continue for thousands of steelworkers and their families.

It seems Tata believe this is in the best interests of sustaining steelmaking in Port Talbot and its downstream operations but the test will come in the next steps that Tata takes and how the dialogue with

There have been reports of talks between Thyssenkrupp and Tata for some time, so now Tata should come clean about their intentions.

“Tata must also recognise the level of frustration, even anger, among the workforce over these delays and uncertainty. It is vital that they work with Community to reassure and protect the greatest asset to the business – its people.

“Today’s announcement raises many more questions and we will be seeking answers on behalf of our members in the coming days.

Unite Press Release 

Community Press Release

Tata Steel UK Press Release