World Economy

Tata Steel Ending UK Venture

Tata Steel Ending UK VentureTata Steel Ending UK Venture

Britain battled to save its steel industry on Wednesday after India’s Tata Steel put its British operations up for sale, leaving thousands of jobs at risk as a result of cheap Chinese imports.

The move comes less than three months before Britons vote on the country’s membership of the European Union in a referendum dominated by concerns about the economy, Reuters reported.

The government said it was working to broker a deal with potential buyers after Tata Steel sought to end its almost decade-long venture in Britain, which employs 15,000 people but has been hit by high costs and Chinese competition.

“This is my fourth time that I’ve been placed under the threat of redundancy,” 51-year-old steelworker and union representative Mark Turner said outside Tata’s plant in Port Talbot in Wales, Britain’s biggest steel works. “If this shuts, there is nowhere else to go.”

The move could have an impact on Britain’s closely fought June 23 vote over whether to stay in the EU.

Britain’s eurosceptic media have blamed Brussels for preventing London from taking greater steps to protect the industry and one of the campaign groups hoping to lead Britain out of the EU said it was “killing our steel”.

But supporters of EU membership said the bloc was not responsible for the industry’s plight and that the EU was a big buyer of British steel.

Britain’s business minister Sajid Javid said he was seeking investors to take over the assets.

“There are buyers out there,” he said as he cut short a trade trip to Australia to return to Britain. “It might require some kind of government support and we are more than ready to look at all ways that we can provide commercial support.”

Javid rejected a call from the opposition Labor party for the government to take a stake in the industry.

 Practical Limits

In India, there is also a shift towards producing more high value-added steel. “Clearly the world is moving in that direction,” said H. Shivramkrishnan, chief commercial officer at India’s Essar Steel.

Seshagiri Rao, joint managing director at India’s JSW Steel Ltd, said: “Every steel company, particularly the major companies, they’re looking at value addition, meaning high-end value-added steel products—tin plates or automotive steel, or high-strength steel or electrical steel.”

But ultimately, he added, there are practical limits to how much of a company’s output can be higher end steel.

“I don’t think anybody can do more than 30% to 35% so the balance 65% remains commodity grade steel.”

Meanwhile, Chinese firms are moving up the value chain too.

Baoshan Iron and Steel Co Ltd, China’s biggest listed steelmaker, expects its huge, modern Zhanjiang steel production base with annual capacity of about nine million tons and which it calls its “dream factory” to operate later this year.