Tata Steel announces 10-year investment plan for UK

The Indian giant is planning to come up with a competitive defined contribution scheme.

The Dollar Business Bureau

In a bid to save jobs in the United Kingdom, Tata Steel has announced its 10-year commitment to a billion-pound investment plan as a result of its discussions with the steelworkers unions.  

The company has said that it will keep operating both its furnaces at Port Talbot steelworks located in South Wales for a minimum of five-years along with giving other assurances to its staff working in UK's largest steel plant.

The Indian giant will also hold talks with its employees on a proposal to close the British Steel Pension Scheme as it has liabilities of more than 15 billion pound. It is planning to offer its employees a competitive defined contribution scheme instead.

According to Tata Steel Group Executive Director Koushik Chatterjee, the company in UK plans to consolidate its business by making it more competitive in terms of having a long-term investment strategy. “The delivery of the transformation plan in the next couple of years, combined with a structural solution for the British Steel Pension Scheme fund, is essential to provide the affordability and financial self-sufficiency for future investments and also service its financial obligation to its stakeholders,” Chatterjee further stated.

Chatterjee also elaborated on the deal between the Tata Steel UK and the unions expecting to signify an important step in the journey to develop a "sustainable future for our UK steel business".

The steel industry is already witnessing unprecedented times globally which has made even more important for Tata Steel to become financially sustainable.

“The proposed changes to future pension provision and other employment terms are necessary to de-risk the company and help achieve long-term sustainability. We are also working separately on a necessary structural solution for the British Steel Pension Scheme fund,” said Chatterjee.

The Dollar Business Bureau - Dec 08, 2016 12:00 IST