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uk plant: Call on UK plant must be taken within next year: Tata Steel MD

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Tata Steel will have to take a call on the future of its operations in the United Kingdom within the next year as some of its assets there approach the end of their operational life, managing director TV Narendran said.

“Some of the assets are going to come to the end of life, so we need to take that call anyway. The government also knows that. They have also visited our sites,” Narendran told ET on Tuesday. “Hopefully, we will come to a conclusion in the next few months.”

The company’s negotiations with the UK government got delayed over the past two-three years due to multiple governments coming to power. “But now, the government is very keen to take it to a logical end,” Narendran said. “The final call has to be taken within the next year.”

Tata Steel, which entered the UK in 2007 after acquiring British-Dutch Corus Group, operates the largest steel plant in the island nation, and is seeking fiscal support from the British government to support transition to cleaner steelmaking technology.

The UK operations have inherently high costs that affect profitability and do not justify investment in modernisation without government support, the company has said.

ET reported Monday that the management of Tata Steel is likely to meet British Prime Minister Rishi Sunak in September to discuss fiscal stimulus for the UK plant.Tata Steel UK reported a loss for the first fiscal quarter ended June as demand and price fell while input costs remained elevated. Narendran said the performance in the UK should improve in the latter half on expectations of better realisations and lower energy costs.Across the sea, in the Netherlands, one of the two blast furnaces at Tata Steel’s Dutch plant is undergoing maintenance, which has affected production, pulling the unit into the red in the April-June period. The Netherlands unit is the profit leader of Tata Steel’s European business.

Subsequently, the European business will continue to remain under pressure during the ongoing quarter as well, as the Dutch blast furnace is expected to be operational only from November this year, Narendran said. However, post that, there will be a turnaround in European operations, he said.

Speaking about Tata Steel’s India business, Narendran said profitability suffered on account of lower prices.

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