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Tata Steel to Close Construction Products Business in South Wales
11/07/2011 - Tata Steel announces plans to cease operations at its loss-making Construction Products business, a Llanwern-based operation focused on roll-formed products and assemblies.
Tata Steel has announced its intention to cease operations at its loss-making Construction Products business, an operation focused on roll-formed products and assemblies. Based at the company’s Llanwern site in Newport, this business currently employs some 70 people.
“It is with great regret that, following a detailed review of the TSCP business, we have proposed to cease operations at Construction Products,” stated Paul Steele, Tata Steel’s Managing Director for Distribution UK & Ireland. “Clearly this is a very difficult time for the people who work for the business and I would like to pay tribute to everyone who has tried so hard to enable this business, which has operated at a consistent loss since 2008, to overcome the continuing economic downturn.
Steele explained that the Construction Products business focuses on floor decking systems, highway barrier systems for roads and parapets, and lightweight frames for a variety of applications, sold primarily to the construction industry, which has not recovered well from the financial crisis, and to market areas dependent on public procurement activity, which has also been severely affected by the long-running economic downturn.
“Our markets are highly competitive,” continued Steele. “On two occasions recently the company has attempted to address the business’s challenges by restructuring it to focus on new and developing markets. These have included safety platforms for protecting people handling freight and also solar array structures. Despite these efforts, most reluctantly, we have come to the conclusion that there are no prospects of generating sufficient viable new business to sustain this operation.”
The company intends to conduct a full, formal consultation process over a statutory minimum period of 30 days with the Trade Unions and employee representatives, and with all employees on an individual basis. The said it will explore all opportunities to re-deploy employees where practical and to assist those people leaving the business through a range of support services.
During the consultation process, the company will also evaluate options to minimize the impact of the closure and to retain some vital parts of the Construction Products order book. This will involve negotiation with certain customers where manufacturing agreements exist.
The company noted that the announcement regarding closure of its Construction Products business does not impact any of the other manufacturing operations based at Llanwern.
Steele explained that the Construction Products business focuses on floor decking systems, highway barrier systems for roads and parapets, and lightweight frames for a variety of applications, sold primarily to the construction industry, which has not recovered well from the financial crisis, and to market areas dependent on public procurement activity, which has also been severely affected by the long-running economic downturn.
“Our markets are highly competitive,” continued Steele. “On two occasions recently the company has attempted to address the business’s challenges by restructuring it to focus on new and developing markets. These have included safety platforms for protecting people handling freight and also solar array structures. Despite these efforts, most reluctantly, we have come to the conclusion that there are no prospects of generating sufficient viable new business to sustain this operation.”
The company intends to conduct a full, formal consultation process over a statutory minimum period of 30 days with the Trade Unions and employee representatives, and with all employees on an individual basis. The said it will explore all opportunities to re-deploy employees where practical and to assist those people leaving the business through a range of support services.
During the consultation process, the company will also evaluate options to minimize the impact of the closure and to retain some vital parts of the Construction Products order book. This will involve negotiation with certain customers where manufacturing agreements exist.
The company noted that the announcement regarding closure of its Construction Products business does not impact any of the other manufacturing operations based at Llanwern.
The European operations of Tata Steel (formerly known as Corus) comprise Europe's second-largest steel producer. With main steelmaking operations in the UK and the Netherlands, they supply steel and related services to the construction, automotive, packaging, material handling and other demanding markets worldwide.
Tata Steel is one of the world’s top ten steel producers. The combined group has an aggregate crude steel capacity of more than 28 million tonnes and approximately 80,000 employees across four continents.
