Price of a pull-out
THE termination of the off-take agreement with Redcar’s Teesside Cast Products plant by an international consortium has cost steel giant Corus around £95m, it has emerged.
In April the consortium responsible for buying nearly 80% of the plant’s output abandoned a ten-year deal . Since then the site’s 2,000 workers have been living under the fear of redundancy.
Yesterday Corus’ parent Tata Steel Group reported results for the quarter ending June 30. Tata Steel Group made a loss after tax of £238m ($461m) as compared to a profit of £499.9m ($814m) a year earlier.
Turnover at its Tata Steel Europe business - which takes in Corus - was more than halved falling to £1.95bn from £4.2m a year earlier.
Tata Steel Europe chief executive Kirby Adams said: “We anticipated that the first two quarters of the current year would be a difficult time for European steelmakers, which is why we started taking action early this calendar year to align our output and costs to the lower demand levels in Europe.”
He said “the unexpected termination of the Teesside off-take agreement in April” cost the business $155m in operating cash flows during the first quarter.
Work is continuing to secure a long term future for the TCP site. But earlier this week there was better news for TCP after it was announced that it had secured orders to keep the plant operational until the end of October.
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