Indian steel major Tata Steel is planning to mothball one of its plants in Wales to focus on manufacturing higher-value products, a move that could lead to around 250 job cuts.
The jobs are expected to go mainly at Llanwern in Newport, where its mills will stop running.
Tata Steel in a statement said it needs to “reduce costs and focus on manufacturing higher-value products”.
The firm said it had told employees at its South Wales-based Strip Products business that it will concentrate production at its hot strip mill at Port Talbot in Wales and the similar mill at Llanwern will be mothballed.
“Tata Steel has invested upwards of £350 million to improve the steel industry in Wales in the past five years… But surging, and often unfairly traded, imports have combined with a strong pound to create a very challenging business environment,” said Stuart Wilkie, director of Tata Steel Strip Products UK.
“The changes we have told employees about will reduce our costs and enable us to focus on generating more value from our products, which will improve our competitiveness.”
Dave Hulse, national officer of the GMB workers union, told reporters: “This is more bad news for the steel industry. This comes on the back of the recent announcement that 720 jobs will go in the Speciality Business.”
Roy Rickhuss, general secretary of Community and chairman of the National Trade Union Steel Co-ordinating Committee, added: “We fully acknowledge that Tata Steel, and indeed the entire UK steel industry, is under huge pressure to reduce costs and become sustainable. However, it is extremely regretful that most of those to be laid-off are highly motivated and committed young people, currently employed through an agency but who hoped to pursue a career within Tata Steel.”
A Welsh government spokesperson described the latest news as “extremely disappointing”.
“We have repeatedly lobbied the UK government for urgent action to address issues such as high energy costs that are disadvantaging the steel industry across the UK against our overseas competitors,” he said.
Last month Tata Steel had proposed 685 job cuts in two plants in Rotherham and Stocksbridge in South Yorkshire and 35 job cuts at Wednesbury in West Midlands from March next year.