Trostre steelworks “would be sold as a going concern”

(Title Image: Tata Steel Europe)

One of the two topical questions this afternoon focused on news of the possible sale of Llanelli’s Trostre steelworks in order for a merger between Tata and ThyssenKrupp to go ahead.

Deep Concern

Helen Mary Jones AM (Plaid, Mid & West Wales) summed up the local area’s concerns on the news. It’s a similar situation to what the plant faced under Corus and Trostre had to prove that it was more productive and better-skilled than a plant doing the same work in the Netherlands. Trostre was also, of course, an important part of the Port Talbot steelworks supply chain and remains a profitable business, employing around 700 people.

Economy & Transport Minister, Ken Skates (Lab, Clwyd South) urged caution and the Welsh Government had already been in discussions with Hans Fischer (CEO of Tata Steel Europe).

“I think it’s very important to say….that the site could not be sold off in order to close it. It would have to be sold in a way that ensures it has a viable future. I would not wish to speculate too much on what’s been reported today, due to it being a commercially confidential matter between two companies.”
– Economy & Transport Minister, Ken Skates

The supply chain was the focus of the next question from Suzy Davies AM (Con, South Wales West). This merger was now looking very different from what was originally anticipated by many AMs. Would this news affect ambitions by the Swansea Bay City Region to develop a centre of excellence for steel innovation at Port Talbot? Was a commitment to avoid compulsory redundancies under the proposed merger still in effect?

The Minister said this wouldn’t impact any further decisions on support for Port Talbot steelworks. He promised to circulate a note to AMs on the terms by which the Welsh Government are supporting Tata.

Looking for “the cheapest deal they can get”

David Rees AM (Lab, Aberavon) said that he hoped the proposal to sell Trostre as a going concern would remain so as the companies will be looking for the cheapest deal they can get in order to push the merger through, not necessarily the best deal.

“I do worry about this because it’s not just Trostre being mentioned, because Tata are also divesting themselves of….the Orb works in Newport. It seems that Tata are divesting themselves of resources more than ThyssenKrupp are in this joint venture. So, what discussions are you going to have with Tata….because I’m deeply concerned that when Bimlendra Jha left his position, there was no UK representation, effectively, for Tata in the UK, and particularly in Wales….”
– David Rees AM

The Minister said it wouldn’t be the place of the Welsh Government to get involved in the merger negotiations. He did, however, expect any “pain” in the selling of assets to be split 50:50 between the two companies.

With regard the Orb works, the Welsh Government have worked with Tata in the pass to sell assets, including the Afon Tinplate works which are now trading under Tinmasters – there’s no reason why the Orb works or Trostre couldn’t have a similar positive outcome.

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