Cogent Power (a subsidiary of Tata Steel) has today announced an improvement programme focused on securing a more sustainable and competitive performance at its Orb Electrical Steelworks in Newport, South Wales.
The programme focuses on higher quality products, improving and streamlining production processes and creating a leaner and more flexible workforce. The proposed workforce restructuring may lead to a total of 83 direct jobs and up to 40 contractor roles being at risk.
Stuart Wilkie, Managing Director of Cogent Power said: “This is going to be a difficult time for all concerned but the changes we are making are essential for the long-term future of the operations at Orb. We are starting a thorough consultation process, with the full involvement of the workforce, their representatives and appropriate authorities. Every effort will be made to support employees and, where practicable, achieve job losses through voluntary redundancies, whilst retaining critical skills and experience for the future.”
Stuart Wilkie added: “We are making these changes to focus on improving the competitiveness of this business and steel making in Wales. The investments we have made into production process improvements are being combined with leaner and more nimble process-routes, to enable us to maintain our production capacity and improve efficiency, yield and quality.
“We are faced with reduced demand for electrical steels and a highly competitive global market place. That is unlikely to change in the medium term. European demand for the grain oriented electrical steels we make is still more than 20 per cent down on 2008 levels and we see high levels of imports into Europe. We anticipate it will be several years before demand returns to 2008 levels. If we are to maintain the great steel heritage we have here at Orb, we must act now to compete effectively in these challenging market conditions and to mitigate rising costs in areas like energy.”
Cogent Power is facing the prolonged downturn in demand by adopting a strategy at Orb of maximising output of high-grade products for electrical transformer applications. This strategy is being enabled by changes to the production process which has allowed the business to capture value by sourcing feed-stock from within the Tata Steel operations in Europe.
Mark Spencer, Strip Trade Board Representative of Community Union and Secretary of Orb Joint Works Council said: “This is a disappointing day for our members at Orb, who have all done their utmost to facilitate the significant changes the business has undergone through the crisis. We will be working together with management to minimise the impact of the reduction on our members. The employee representatives will be proactively contacting members to ensure they receive the support they need during this difficult time.
“We support Cogent Power’s commitment to commercial success at Orb. Today’s announcement is at least partly attributable to the continuing disparity in energy costs faced by industrial users in the UK compared to their overseas competition. We again call on Government to dispense with half measures and to properly mitigate for manufacturers the burden of unilateral carbon taxes like the Carbon Price Floor and the Renewables Obligation that are clearly ruinous for British industry.”
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About Tata Steel in Europe
The European operations of Tata Steel, whose main steelmaking sites are in the UK and the Netherlands, comprise Europe's second largest steel producer. They supply steel and related services to construction, automotive, packaging, rail, lifting & excavating, energy & power, aerospace and other demanding markets worldwide. The combined Tata Steel group is one of the world’s largest steel producers, with an aggregate crude steel capacity of more than 29 million tonnes and approximately 80,000 employees across four continents. Twitter: Follow us @TataSteelEurope
About Cogent Power
Cogent Power, a wholly owned subsidiary of Tata Steel, is a global supplier of electrical steels for large rotating machines, generators and transformer cores, with manufacturing and service operations in the UK, Sweden and Canada. Cogent Power is a world-renowned brand in electrical steels and a recognised leader in the manufacture of thin-gauge electrical steels which are developed for use in high-frequency machines.