The steel business provided a solid foundation over which one of India’s biggest conglomerates Tata was built, before expanding into everything from salt to automobiles. Tata Steel entered the UK with its successful acquisition of Corus Group in 2007, after it outbid Brazil-based CSN. More than a decade later, the Indian giant is reportedly considering an exit from Britain, in the absence of any government support during hard times.
Initial euphoria long gone
Tata had acquired Corus in the UK when it was the sixth largest steel producer globally, by 2020 it was reportedly seeking a $1 billion bailout package to save its Port Talbot plant in Wales. But as hope for a $1.7 billion subsidy package from the government is fading away, the corporation might be wrapping up its operations in the country. But Tata’s CFO has told Moneycontrol that the company is still conducting negotiations with the British government, and reports of an exit are based on speculation.
India and China provide steel for the UK
Tata owns Port Talbot which, along with Scunthorpe steelworks owned by China’s Jingye, produces 85 per cent of the steel in Britain. Port Talbot employs 4000 people right now, and has to cut down its emissions to meet the UK’s net-zero targets. Higher gas prices and other expenses have increased operating costs for Port Talbot, which has made it hard for Tata to remain self-sustainable in the UK.
UKs economic crisis scaling up costs
Prices in the UK have gone up by almost 10 per cent in the past year for UK, and tax cuts announced earlier may also be rolled back by the government. Tata Steel had also posted a loss in its first quarter for 2022. The firm’s MD TV Narendran has said that their existing units can function as long as there’s cashflow to support them.
Tata had expanded into the UK steel industry, back when Indian firms experienced robust growth, and it had also bought British auto firm Jaguar Land Rover from Ford a year after that.
Is Tata wrapping up its steel business in the UK? The corporation has clarified
Tata Steel had entered UK with an acquisition back in 2007, a year before it took over Jaguar Land Rover in the country.
FPJ Web DeskUpdated: Friday, October 14, 2022, 04:50 PM IST

Representational image | Image by sawaeng wonglakorn from Pixabay
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