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| Corus to restart another UK unit on rise in demand |
| Nevin John / Mumbai Sep 15, 2009, 00:48 IST |
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But the plan to cut 528 jobs at the South Wales unit to continue.
Corus, Tata Steel’s European unit, will soon restart its mothballed Port Talbot plant in South Wales, a month after reopening its Llanwern strip mill at Newport. As demand picks up in the West, the company said it was preparing to re-ignite one of its two blast furnaces at the Port Talbot plant to “take advantage of business opportunities”.
However, a company official said the company was pressing ahead with a plan to cut 528 jobs in South Wales. Corus, which Tata Steel acquired for $12 billion in 2007, has laid off 5,545 employees, bringing announced job cuts, since the collapse in steel demand, to 14.4 per cent of its worldwide work force.
The blast furnace in Port Talbot was shut last December, alongside the ones in Scunthorpe and in the Netherlands, as part of its plan to reduce production by 30 per cent. Also, it had said in May that it might close the Teesside plant after a group of buyers walked away from a 10-year purchasing agreement. Since the Teesside plant has orders till October, it has not yet shut operations, said company sources.
Corus Spokesperson Bob Jones said in an emailed reply: “Corus is to start preparations to reopen the No 4 Blast Furnace (BF4) at its Port Talbot works in South Wales. The reopening will give Corus’ UK strip products’ business greater operational flexibility, improving customer service and shortening lead times.”
Ratan Tata, chairman of Tata Group, said last month at the annual general meeting that the trade fall in Europe and the US had bottomed out. “Demand is coming back in the auto sector, especially in these geographies,” he added.
Tata also said, “We expect an economic revival and production would be increased to 80 per cent of the capacity by the end of this year. It would increase further to 100 per cent by next year.”
The Anglo-Dutch subsidiary of the Indian steel maker had cut production by half during the global financial crisis and demand slump. In the first quarter, the weak demand and low steel prices dented revenue and the company posted a consolidated net loss of Rs 2,209 crore. Total consolidated income fell 46 per cent to Rs 23,496 crore during the June-ended quarter.
An analyst with a Mumbai-based firm said western markets have not come back to normalcy yet. “Still, there is a feeling that demand will soon pick up because of the recovering consumer confidence. This reopening is an encouraging sign for the steel industry,” he said.
Corus, which has an annual production capacity of 20 million tonnes, has plants in the UK, the Netherlands, Germany, France and Belgium.
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