Tata Steel to sell Long Products Europe business by March 2016

Forced to go for more restructuring of its UK business due to a “challenging marketplace”, Tata Steel will sell its Long Products Europe business by the end of the current financial year.

The long products business in Europe manufactures plates, sections, wire rod and semi-finished steel for different markets, including construction, ship-building & engineering, energy and wire drawers. These products are made at its mills in Teesside and Scunthorpe in the UK.

When asked about the long products business, Tata Steel Europe Chief Executive Karl Koehler last week said: “Our stated strategy stays unchanged. Long products will not have a future within Tata Steel.

“And that means we will come to one of the possible options which I don’t need to spell out and decisions about that have to happen within the timeframe of this fiscal year, to say the very least.”

The steel maker, which reported Rs 16,948 crore turnover from Europe in September quarter, said a “sharp deterioration” in market conditions impacted performance in the UK with an EBITDA loss of Rs 238 crore.

On Europe, Koehler, in an analyst call, said operating result turned negative this year due to huge challenges that the global steel industry is facing. In the UK, the situation has exacerbated on account of unhelpful exchange rates and regulatory costs, which is destroying competitiveness.

The firm had been in talks with Klesch following signing of a Memorandum of Understanding (MoU) in October 2014.