Tata Steel Company - Business Media Group

Tata Steel Company

Tata steel company is the 2nd biggest steel manufacturing company in Europe with a crude steel production capacity of over 12.1 MnTPA. Tata Steel manufactures different high-quality strip and long products, which range from hit-rolled to Metallic coated, they also make  refurbished steel, profiles, alloy steels, electrical steels, and construction systems.

The manufacturing facilities of Tata Steel in Europe include hubs (strop products Mainland Europe, Strip product, and Downstream operations). Tata steel company owns two (blast furnace-based) steel-making facilities in Ijmuiden, South Wales, the Netherlands, and Port Talbot. They have other facilities across Europe that produce different types of secular steels, ultra-pure re-melted steels, and various rolling and coating lines.

Tata steel Company did not establish its presence in the European continent until 2007 when it acquired Corus in 2007.

 Background of Tata Steel Company

British Steel plc was a huge British Steel producer, it consisted of the assets of fiormer private companies which had been nationalized by the Labour Party government of Harold Wilson on the 28th of July, 1967. The company became private on 5 December 1988 following the British Steel Act 1988.

British Steel merged with Koninklijke Hoogovens, a Dutch Steel producer in October 1999 to form what was called Corus Group. When Corus Group was formed in 1999, it became the largest steel company jn Europe and the third-largest in the world. In 1999, shortly before the merger of BSC, a French Steel Company called Sogerail, was acquired for £83 million and then in 2003, the company also became the sole owner of SEGAL, a galvanizing company as a joint venture.

Corus declared in March 2006 that it had conceded to sell its aluminium rolled products and extrusions businesses to Aleris International, Inc. for £572 million. The company under a long-term agreement was to keep its smelting operations and supply Aleris. A sale took hold in May 2006, and on the 1 August, the sale to Aleris Europe was completed.

 Tata Takeover

Corus announced on 20, October that it had accepted £4.3 billion from Tata Steel;  a valuation of £4.55 per share. The combination of high Tata and Corus, (18.18MT pa and 4.4MT pa) would go on to create the fifth biggest steelmaking company in the world. However, on the 19th of November, 2006, Companhia Siderùrhica Nacional (CSN), a Brazilian Steel company launched a counteroffer for Corus at a higher valuation of £4.75 per share. CSN and Corus in 2002 had previously discussed a merger in 2002 but cancelled it late 2002, CSN’s iron order assess would procure synergy with Corus’s desire to import ore.

Tata submitted another bid at £5.00 per share which  again was countered by CSN with another improved deal at £5.15 per share which was accepted by the board of Corus on 11 December 2007. This bidding war led to an auction held on 30/31 of January held by the Panel for Corus’s shares. The auction ended with Tata outbidding CSN at £6.08 vs. £6.03 per share. CSN’s bid was supported by Goldman Sacks while Tata bid was supported by ABN Amri, Rothschilds, and Deutsche Bank.

As a result of the Great Recession in England, Corus announced job cuts of 1000 in the Netherlands and 2,500 in the UK as well as a consequent downturn in the demand for steel. Cuts also included the termination of production at hot strip mill in Wales(600 jobs), Llanwern, and over 700 major job losses at the engineering steel production site in Rotherham.

In September 2010, Corus declared that it was changing its name to Tata Steel Europe and adopting the Tata logo.

On 23 November 2012, Tata Steel Europe announced that due to restructuring proposals, there would be a net loss if 900 jobs in the UK.

Sale of UK operations

Towards the end of 2014, Tata Group remained £13 billion in debt which had continuously increased following its acquisition of Corus and the reduced demand in Europe. This led to the company’s sought to go reduce liabilities: the European Long products division was proposed for sale to Klesch Group.  In August 2015, talks regarding the sale to Klesch ended unsuccessfully with Klesch noting energy prices and (dumping of) Chinese steel imports as factors against the sale.

The termination of Dalzell and Clydebridge plants were announced. This determination in Scotland and further reductions of 900 jobs at Scunthorpe led to 1200 redundancies in late 2015.  In late 2015,  Tata Steel UK arrived at a preliminary agreement with Greybull Capital for it to acquire Tata’s European long products division, with the exclusion of Dalzell and Clydebridge plants. At the end of March 2016, the Tata board refused a turnaround plan for the Port Talbot site and declared it would be open in selling part or all of its Uk business. Its UK steel business operations have lost £68 million in months(3) leading to  February 2016, from a profit the year before despite rising demand. Factors leading to this were: high energy costs (including green taxes), high business rates, and low demand. Also, the UK government had voted against increased tariffs on imported Chines steel due to its free trade policies, thereby limiting import duties to minimal amounts. The Daily Telegraph reported that the failure of the UK government’s failure to back EU attempts to increase anti-dumping measures on imported steel had been the major reason for Tata’s decision to exit the UK steel business.

Tata set a deadline if 28 May 2016 for bids for the rest of its UK business and by early May, Tata confirmed that it was considering offers from as many as seven bidders for the whole UK business. It stated equally that it was only taking bids for the whole UK business. This sale did not eventually take place. The company began discussions with other steelmakers to form a joint venture between their respective European steel businesses.

In November 2016, Liberty House signed a letter of intent with Tata in the sale kf Taga’s specialty steel business (Rotherham Stocksbridge, Brinsworth) for £100 million. The sale’s completion was done in February 2017 to form Liberty Speciality Steels and included the Wednesbury bright bar division and Hartlepool tubes, division.

Over the last 150 years, the courage, the foresight, and the transformative influence of the group have pushed it into becoming a global powerhouse. Tata steel operates in a safe way for their people and is respectful to the environment.

Show More

Related Articles