New Delhi, Oct 16 (IANS): Indian steel giant Tata Steel is planning to sell its Long Products division in Europe to Geneva-based Klesch Group, a company statement said here Wednesday.
"Tata Steel has today announced the signing of a Memorandum of Understanding with Klesch Group to undertake detailed due diligence and negotiations for the potential sale of its Long Products Europe business and associated distribution activities," the statement said.
Long products include rods and wires, bars, structural shapes and rails, and tubes.
About 6,500 people are employed at Long Products Europe and its distribution facilities. Tata Steel employs 30,500 people across Europe, including 17,500 in Britain.
Under the agreement, Tata would sell Britain-based assets including Tata Steel's Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York, as well as other operations in France and Germany.
Karl Koehler, chief executive of Tata Steel's European operations, said: "We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome. We will regularly engage with our employees and other stakeholders throughout this process, and we will consult with the trade union representatives and works councils."
Explaining the context and rationale for this decision, he said: "We are making huge strides on our strategic journey to become a premium, customer-centred steel company thanks to investment in equipment, technology and customers, together with the substantial contributions from our employees."
"We've improved the competitiveness of Tata Steel's European operations, including Long Products Europe which now supplies more of the innovative steel rail, rod, plate, sections and special profile products demanded by customers," he said, adding that accelerating the pace of innovation on advanced steel solutions, helping customers succeed in their markets and creating a sustainable asset base requires significant capital and expertise.
"We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies," Koehler said.
"We want to build a sustainable business in Britain and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that."