Tata Steel, which has a plant employing hundreds of workers in Corby, plunged into the red today (Thursday, May 23) with losses of £840m after wiping £1bn off the value of its European arm, which has a UK workforce of 18,500.
The overall post-tax figure for the group represents a sharp fall from the previous year’s £642m profit, and is largely accounted for by the write-down.
Tata said “severely depressed conditions” in Europe and the UK had left steel demand almost 30 per cent lower than 2008 pre-recession levels, leading to last week’s writedown, though underlying performance in the region had improved with increased volumes in the last quarter.
Unions have said the company’s woes will concern staff in the UK at sites including Port Talbot, Rotherham and Scunthorpe, which are still reeling from 900 job cuts last year.
Tata, which bought Anglo-Dutch steel giant Corus in 2007 for £6.2bn, has endured a tough time during the downturn as demand from construction and car-making dived, forcing thousands of lay-offs and plant closures.
Its UK employees represent more than half of the company’s European workforce. The firm announced its latest wave of redundancies in November, including 600 in south Wales, as part of a drive to cut costs.
Announcing today’s results, Tata said deliveries were down in its European operations over the year, largely due to repairs and outages, but that the re-lighting of a blast furnace at Port Talbot after a £220m re-build has helped performance in the fourth quarter.
The company said that it was continuing a programme of restructuring, cost-cutting and efficiency while also taking on 500 apprentices in the UK over the past couple of years.
Tata Steel is part of the huge Indian Tata Group, which also owns Jaguar Land Rover.