Steel News

Tata Steel to Close U. K. Steel Mill

9/3/2019 - Unable to find a buyer for its Orb Electrical Steels operation in South Wales, and unwilling to roll the dice on a substantial upgrade, Tata Steel Europe will instead close the facility, the company has announced.

In a statement, Tata Steel said that despite having explored all options, it could not find a path forward for the facility.

“The Orb Electrical Steels business has been loss-making for several years as it struggled to compete in the fast-moving market to supply steels used in electricity transformers in which customer requirements have out-stripped the site’s capability,” the company said.

“Converting the site to create steels for future electric vehicle production would cost in excess of GBP50 million in a highly competitive market where Tata Steel faces higher-volume competitors both in Europe and globally,” Tata Steel Europe  chief executive Henrik Adam said the decision is difficult, but necessary. It will, he said, allow Tata Steel to focus its resources on its core European business.

“Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges. We saw no prospects of returning the Orb business to profitability in the coming years,” he said.

Orb Electrical Steels is one of three pieces of Tata’s Cogent Electrical Steels. The other two are Cogent Power Inc. in Burlington, Canada, and Surahammars Bruks AB, in Surahammar, Sweden.

Tata will retain Surahammars Bruks, which makes nonoriented electrical steel, but will sell Cogent Power, which makes cores for electrical distribution transformers, to Japan’s JFE Shoji Trade Corp., part of JFE Steel.

“The combination of Cogent and JFE Shoji Steel America Inc. will make it possible for JFE Shoji to service the electrical steel market which is expected to grow including automotive field throughout North America,” JFE said in a statement.

“Furthermore, globally, we expect that the acquisition will enhance our competitiveness by sharing and integrating of the technical skill and business experience which we have developed in Asia and the technical skill and business experience of Cogent in Canada and North America,” JFE added.