MUMBAI -- Tata Steel (IW 1000/183) said on Tuesday it will cut about 400 jobs at its Port Talbot plant in South Wales, around 10% of the workforce, as it looks to reduce costs in order to compete more strongly in the EU's manufacturing industry.
Dealing a blow to the UK government's pledge to support British manufacturing jobs and diversify the economic base, Tata Steel Europe's chief executive, Karl Koehler, said in a statement the measures were "vital if we are to build a competitive future for our Strip Products business in the UK."
Koehler added that steel demand and prices were likely to be under pressure for some years.
In his annual budget, UK finance minister George Osborne offered to help UK manufacturing by extending a compensation scheme that offsets some of the industry's carbon costs out to 2020, and by freezing the country's carbon price floor.
Despite these measures, UK energy-intensive industries such as steel pay about 30% more for electricity than their main EU competitors and are subject to some of the highest carbon taxes in Europe.
Indian-owned Tata Steel became involved in Europe through its $13 billion acquisition of Britain's Corus in 2007.
By Aman Shah and Maytaal Angel | Reporting by Aman Shah in Mumbai and Maytaal Angel in London | Editing by Jeremy Gaunt
Copyright Reuters 2014
