TATA Steel has confirmed that negotiations about the potential sale of its European long products business and associated facilities to Klesch Group have been discontinued.
The company had been in talks with Klesch following the signing of a Memorandum of Understanding in October 2014.OnAugust 2 the long products business, with the associated distribution facilities, became a 100 per cent subsidiary of Tata Steel UK Ltd.
In a statement, Tata said: “The new standalone business combines the strength of Tata Steel with a flexible and more focused operational approach. The long products business will continue to focus on supporting customers by supplying them with innovative, advanced steel products – rail, wire rod, plate, sections and special profiles. This market differentiation strategy will remain a key focus for long products as progress is made towards a more sustainable future for the business.”
Karl Koehler, chief executive of Tata Steel’s European operations, said: “The long products business has been facing severe challenges. The establishment of long products as a wholly owned subsidiary of Tata Steel UK has created a new structure that will enable it to determine the strategic options to be assessed and the appropriate actions to be taken.
“The UK steel industry is faced with stiff headwinds in the shape of rising imports, uncompetitive energy prices, a strong pound and the lack of an industrial strategy for the steel sector. Now more than ever the UK Government needs to demonstrate commitment to steel as a foundation industry for the UK economy and to take immediate action to mitigate the effects of those issues which it has the power to influence.”