Tata Steel to cut 400 jobs in UK

This follows world's largest steel maker ArcelorMittal shutting down some sites in Belgium and France to battle weak demand in European markets.

Global giant  Tata Steel today said it will cut about 400 jobs at its South Wales plant in the UK as part of cost-trimming efforts in the wake of lower demand in Europe.

"Tata Steel today announced restructuring proposals. The proposed changes would enable the UK Strip Products Business to compete in Europe's lower market demand era by reducing costs equivalent to the loss of about 400 jobs in Port Talbot," the company said in a statement.

This follows world's largest steel maker ArcelorMittal shutting down some sites in Belgium and France to battle weak demand in European markets.

Tata Steel's European Chief Executive Karl Koehler said: "Steel demand and prices are likely to be under pressure for some years. Our business rates in UK are much higher than in other EU countries and our UK energy costs will remain uncompetitive until new mitigation measures come into effect.

These proposed changes then are vital if we are to build a competitive future for our Strip Products business in the UK."

Koehler said the company has invested more than 250 million pounds over the last two years in the state-of-the-art steel-making technology in the Strip Products business.

In addition, it is investing in its Hot Strip Mill in Port Talbot and upgraded galvanising line in Llanwern to increase production of high-value automotive steels.

Koehler said, "We will, of course, engage fully with employees, trade unions and our political stakeholders during this restructuring process. And we will do everything we can to support our employees through this unsettling time."

Roy Rickhuss, Chair of the UK trade unions' steel committee, said: "We are obviously very concerned to hear this news and we will do all we can to support those affected by the announcement."

He added that the news demonstrated that despite the Government's trumpeting of economic recovery, the steel sector remains under real pressure.

"We will be seeking an urgent meeting with the company to discuss our concerns about manning levels and reiterate our opposition to any compulsory redundancies."

Tata Steel stock price

On July 01, 2014, Tata Steel closed at Rs 541.35, up Rs 13.05, or 2.47 percent. The 52-week high of the share was Rs 578.60 and the 52-week low was Rs 195.40.

The company's trailing 12-month (TTM) EPS was at Rs 66.02 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 8.2. The latest book value of the company is Rs 634.48 per share. At current value, the price-to-book value of the company is 0.85.

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