Tata Steel Europe back in the black
Tata Steel is back in the black thanks to improving sales and a boost from its supply chain operations, including major investment at its key Steelpark site in Wednesfield.
The Indian-owned steel group's European arm has been hit by cheap Chinese steel imports in recent years, aggravating productivity and pension problems at its UK operations.
But a major revamp and a new pension deal with unions sealed earlier this year has put the steel giant back on track.
It has also invested £20m at its 50-acre Steelpark in the Black Country, the largest steel service centre in the UK where it employs 525 people. In February it unveiled a £4m new robot welding line at Wednesfield to produce more than two million car parts a year.
This helped boost figures for Tata Steel Europe in the last three months, pushing profits to £230 million in its best quarterly performance since 2008.
The strong fourth quarter helped the business generate earnings of £526 million for the last 12 months, compared to a £52 million loss the year before, with stronger market conditions and tailwinds from the fall in the value of sterling, which makes British exports cheaper abroad.
Although the European business shifted less steel, it generated more revenue because of the higher value of the work it was handling.
As well as the Wednesfield Steelpark, Tata Steel employs around another 100 at Walsall and Brierley Hill. The company employs more than 9,000 people in the UK after the sale of its speciality steels business to Liberty House earlier this year.
Mr Hans Fischer, managing director of Tata Steel in Europe, said: “While the majority of our positive earnings results came from our Mainland European supply chain, our UK operations are making positive strides forward to improve their competitiveness.
But he warned: “Steel imports into Europe rose by a further nine per cent last year which continues to restrict domestic growth. We must continue our transformation programmes to improve our competitive performance and continue to focus on developing innovative products and services for our customers.”
The improved performance in Europe helped the overall Tata Steel Group record earnings of more than £2 billion for the last 12 months – its highest figure in the last six years.
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