Tata speaks out to quash Corus ‘sale off’ claims

May 20 2009 by Sue Scott, Evening Gazette

CORUS parent Tata Steel has quashed suggestions that it is no longer willing to sell its Redcar plant to Italian bidders.

A senior executive in Mumbai was quoted today by news agency Reuters as saying the £300m-plus sale was off after the firm leading the bid - Mantova-based Marcegaglia - went quiet on the deal.

The issue is complicated by Marcegaglia’s membership of a steel-buying consortium, which last month tore up a contract to take steel from Teesside Cast Products’ plant until 2013, putting 2,000 jobs at risk.

A statement issued by Corus chiefs on behalf of Tata in the UK said: "Tata Steel wishes to state that any remarks attributed in the media to a Tata executive suggesting that a decision has been taken against pursuing a sale of Teesside Cast Products to Marcegaglia and Dongkuk have been misquoted."

"It remains the case that the prospective buyers have not indicated to Corus that they wish to withdraw from the due diligence process and Corus looks forward to the buyers revealing their longer-term intentions regarding the plant."

Redcar MP Vera Baird was due to fly to Mantova tomorrow to meet Sr Marcegaglia with a view to kick-starting talks.

Between them, Marcegaglia and Dongkuk had agreed to buy an 80% stake in TCP with the promise of new investment and new life for the Redcar works that was rescued from closure four and a half years ago by a buying consortium that included both firms.

The consortium reneged on the 10-year deal in April, wiping out 78% of the plant’s orders. It has been struggling ever since to make up throughput from Corus - the one remaining consortium member to honour its side of the bargain. Even then it looked as though the plant had only six weeks of life in it.

MD Jon Bolton said today that it had managed to stretch the order book by a week to June 22. Meanwhile, Teesside sales executives have gone as far as north America this week to try to secure new contracts.

He said it had also attempted to cut costs by cancelling contracts to buy raw materials struck at the height of the steel boom last year and renegotiating deals at 2009 prices. But he added: "Even looking at better price we are still looking at a £100/t gap - and that’s huge."

Hundreds of Teesside Corus workers and their families flocked to Birmingham at the weekend to take part in a national march to show their sorrow and frustration about the consortium’s decision.

Leading protesters from all over the country, the Teessiders marched to send a clear message that their anger and passion about the demise of 100 years of steelmaking in the region had turned into action.

Protesters at Saturday’s march who estimated that hundreds more contract workers’ jobs also under threat, in addition to businesses who rely heavily on Corus for their own work, said they believed mothballing the Redcar blast furnace could cost as many as 10,000 jobs.

A series of further Save Our Steel marches has been planned on Teesside over the coming weeks to reinforce the strength of feeling of the workforce, their families and other companies affected by the move. Protesters at Saturday’s march in Birmingham said they were hoping for Teessiders to turn out in their thousands to support the forthcoming marches, amid fears the move could be catastrophic for Teesside’s steelworkers, contractors and supply chain.