Steel worker unions are set to meet today to discuss the crisis

Tata steel closures threaten small firms in UK

The closure of Tata Steel's operations could detrimentally affect thousands of small businesses in the UK who rely on the company for their supply.

Union leaders are due to meet today to discuss the crisis gripping the UK steel industry, as efforts continue to save thousands of jobs.

If a solution is not found soon, manufacturers' supply chains will be severely impacted, dealing a blow to thousands of smaller firms across the country and creating a logistical headache for the car industry.

Tata Steel is Britain's biggest steel producer and has put all of its operations up for sale, including the country's largest steelworks at Port Talbot in South Wales, which is currently losing £1m a day due to depressed steel prices and high costs.

The company rejected a rescue plan last week, a decision that will affect approximately 14,000 workers who are employed at steel manufacturing sites across the UK, including Port Talbot, Rotherham in South Yorkshire and Shotton in the North West.

As the government searches for a new buyer, some of Tata's customers are already looking for new sources of steel which is used in everything from car roofs to Heinz baked bean cans, cladding on Ikea buildings and some of the country's coins.

While bigger names have the luxury of a global supply chain to fall back on, smaller companies - which account for around 95 per cent of British manufacturing firms - face a tougher task if the Port Talbot works close.

Tata sells around half of its products into the domestic market, the firm said in 2014.

Tony Mullins, executive chairman of QRL Radiators Group, which buys steel from the firm and employs 150 staff, described the closure as "entirely undesirable" for his company.

"We have to be competitive, we have to produce quality products and historically with Tata that has been possible for us," he said.

However, there is still hope that a buyer can be found in time to prevent the plant’s closure with reports that Marc and Nathaniel Meyohas, the brothers behind the Greybull investment firm, are already putting the finishing touches to a buy-out of Tata's Scunthorpe steelworks.

The Daily Telegraph said the brothers were getting ready to invest £400m into the struggling Lincolnshire plant, saving about 9,000 jobs.

Business Secretary Sajid Javid has signalled ministers are working on plans to reduce energy costs and take on some of the pension liabilities in an effort to attract a buyer for Tata's loss-making UK assets.

Although he said he was not in favour of nationalising the industry, he acknowledged that the government would have to come forward with some financial assistance if there was to be a deal.

Britain’s steel sector has been in bad shape for some time, with 1,700 jobs lost in October following the closure of Redcar steel works which were shut down after last-minute attempts to find a buyer fell through.

Recent articles

Info Message

Our sites use cookies to support some functionality, and to collect anonymous user data.

Learn more about IET cookies and how to control them

Close