New Delhi: Indian steel giant Tata Steel today said it is planning to sell its Long Products division in Europe to Swiss-based Klesch Group and focus mainly on strip products activities. The company, which employs 6,500 people across Europe, said it had signed an agreement with Geneva-headquartered Klesch Group, which it hoped would lead to a sale.
The Long Products division includes operations in Scunthorpe and Teesside in England and Dalzell and Clydebridge in Scotland. It also includes sites in Workington and York, as well as other operations in France and Germany.
"We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome," Karl Koehler, chief executive of Tata Steel's European operations, said in a statement.
"We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies.
"We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that," he added.
Tata has signed a memorandum of understanding with the industrial and commodities group, formalising its intention to agree to a sale. The Klesch group, run by US billionaire investor Gary Klesch, is also investing in an oil refinery in Milford Haven in Wales.
Tata Steel employs 30,500 people across Europe, including 17,500 in the UK. The Long Products division provides steel rail, rod, plate and other steel products to the construction and excavation industries.
UK business secretary Vince Cable said he will look to meet Klesch to discuss the firm's plan's for Tata Steel's Long Products division. "The proposed sale shows the harsh reality of trading conditions in parts of the steel industry. I met the global head of Tata in India this week and he has personally re-affirmed to me his company's commitment to the British steel industry and to investing substantially in Port Talbot and strip steel," Cable said.