Construction slowdown forces closure of Tata Steel's Welsh plant
13 Oct 2010
Tata Steel Europe, the region's second-largest steel maker is closing yet another loss-making unit in the UK that makes steel for modular buildings, due to the downturn in the construction industry in the country.
Tata Steel yesterday said that it plans to cease operations at its Living Solutions site at Shotton Steel Works in North Wales, which was established in 2003 by its previous owner Corus as a downstream diversification using the company's steel to make modular buildings for the construction industry.
The company supplies complete modular system to the construction industry, typically aimed at single living accommodation mainly for the defense sector, which uses it for army barracks, as well as for student accommodation and hotels.
The company, which has never made a profit since its existence, employs around 180 people, mostly at Shotton.
The modular buildings sector is highly competitive in the UK and the company said that it has already attempted to address the business's problems by reducing costs and through a restructuring that took place last year.
Despite these efforts, Tata Steel said there are no prospects of generating viable new business due to a weak building industry and the end of a defense supply contract.
''It is with great regret that, following a detailed review of the Living Solutions business, we have proposed to withdraw from this business activity. Given the continuing weak construction market and the impending completion of a long-term agreement to supply modules to the defense accommodation sector, Living Solutions has been unable to establish sufficient market presence to justify continuing with the business, which has never been profitable,'' said Andrew Black, managing director of Tata Steel Building Systems.
The closure will put at risk 180 jobs in the Living Solutions business and the company has started a formal consultation process with the Trade Unions and employee representatives.
