Tata Steel is acting on expressions of interest from buyers interested in taking on its South Yorkshire-based Speciality Steels business and some of its Hartlepool pipe mills.
The company is preparing to start a formal process about both parts of its UK operation. Both of these operations are largely independent of the strip products supply chain with their own specific characteristics, and are not included in other discussions about the rest of its remaining UK operation.
The board has decided to look at alternative and more sustainable portfolio solutions for the European business, and has begun discussions with strategic steel industry players including German producer thyssenkrupp AG.
Being explored is the feasibility of strategic collaborations through a potential joint venture. However, the talks are said to be at a preliminary stage.
Koushik Chatterjee, Group Executive Director and Tata Steel’s Executive Director for Europe, said: “We have initiated conversations for a strategic collaboration for our European business. A potential strategic combination of strip products businesses offers the best prospects to create a premium, world-class strip steel business with the scale and scope of capabilities to compete successfully on the global stage.
“It is too early to give any assurances about the success of these talks. Such success, especially the inclusion of the UK business in the potential joint venture, would depend on several issues including finding a suitable outcome for the British Steel Pension Scheme, successful discussions with the UK trade unions and the delivery of policy initiatives and other support from the Governments of the UK and Wales. These are necessary for realising a sustainable business in the UK.
The management team and the employees of the company are also continuing to improve the underlying performance of our European business which is very encouraging. We continue to be actively engaged with both the UK and the Welsh Governments, the trade unions and the Pension Trustees.”
Hans Fischer, Chief Executive Officer of Tata Steel Europe, commented: “This is a welcome development, not just for Tata Steel but also for the European steel sector more broadly. Although there’s much work still to be done on any strategic collaboration I’m confident that the direction is the right one – towards higher performance and capability to serve customers. We will continue to communicate with our employees and inform and consult both works councils and trade unions as these discussions develop.”