Tata Steel partly shuts Wales strip mill, cuts 115 jobs

Tata Steel said it has temporarily shut down its hot strip mill partly in South Wales and has cut 115 jobs at the plant due to poor demand from within Britain.

'Tata Steel is temporarily to mothball the hot strip mill at its Llanwern site in Newport, South Wales, with immediate effect,' the company said in a statement.

The facility is expected to remain mothballed until the UK economy and steel demand justify a restart, it said.



'The Llanwern cold rolling mill and Zodiac galvanising line will continue in operation. However, the site will see a reduction of some 115 roles carried out by fixed-term contract employees, agency workers and contractors,' Tata Steel said.

In the meantime the market will be supplied with material from the company's other hot strip mill in South Wales at Port Talbot, whose costs are lower, it added.

Commenting on the development, Jon Ferriman, Hub Director for the Strip Products UK hub said: 'It is with great regret that we have had to make this decision...The Llanwern hot rolling mill is an important operation for us, and our intention is to bring it back into operation as soon as market conditions permit.'

In 2009, the Llanwern hot strip mill was mothballed for nine months, between January and September due to poor market conditions.

Keith Hazlewood, secretary of Union GMB, said the announcement 'yet again demonstrates what a roller-coaster industry the steel industry is'.

He added: 'This decision is a devastating blow for the UK steel industry , the economy and the local community of Newport, south Wales and the supply chain in the surrounding area, especially at this time of the year.'

On Friday (December 02 2011), Tata Steel closed at Rs418.85, up by 4.04%, with a volume of 19.41 lakh shares on the BSE.