The letter of intent covers several South Yorkshire-based assets including the Rotherham electric arc steelworks, the steel purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and in Suzhou and Xi'an, China.
Speciality steels employs about 1,700 people making steel for the aerospace, automotive and the oil & gas industries.
Bimlendra Jha, CEO of Tata Steel UK, said, “The Speciality Steels business is independent of the pan European strip products supply chain and today's announcement is in line with the overall restructuring strategy of the UK portfolio. This is an important step forward in seeking a future for Speciality Steels and we have reached this stage thanks to the efforts of employees, trade unions and management. We now look forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded. We will continue to work closely with trade unions and will communicate any material news on this issue to the employees on an ongoing basis.”
This year Liberty House saved major assets in South Wales, the West Midlands, Scotland and Kent from closure after acquiring them from Tata Steel.
Tata Steel is believed to retain the rest of UK businesses and is in talks with German firm ThyssenKrupp about merging their European steel operations.
Tata Steel UK has invested £1.5 billion of capital over the last nine years. The company's board considers the technical feasibility and economic returns of investments when taking decisions, as well as their affordability. The company is pursuing a transformation plan to create a sustainable future for its UK strip products business. The success of this plan is likely to influence decisions on future investments.
In the current year, the company is pursuing £85 million worth of capital investments covering a range of sustenance and improvement schemes. Tata Steel has recently approved schemes focused on improving manufacturing capability to enable the production of premium steel in Shotton, Llanwern, Trostre, Orb in Newport, and other downstream operations as well as environmental schemes for Port Talbot's power plant. Investments in packaging steel, electrical steel, an automotive finishing line, laser welding and next-generation coated products are in line with the company's strategy to enhance premium product focus for UK strip products supply chain.
Unite calls for independent audit
Unite, one of Britain’s largest manufacturing unions, has sought an independent audit by Tata Steel following the company’s decision to sell its speciality steel business to Liberty House Group. Unite National Officer for Metals, Harish Patel said, “The devil is very much in the detail.” He informed that the key concern areas are job security of the workforce, the future of the British Steel Pension Scheme, investment plans from Liberty House, which is why we will be asking Tata Steel to ensure that we can conduct independent due diligence on its proposals.
Bimlendra also added, “We continue to actively seek solutions to the company's structural challenges and work with all stakeholders. Among those challenges, there is the need to develop a more sustainable business in the UK as well as a self-sustaining future for the British Steel Pension Scheme.”