Tata Steel expects to leverage on the Tata Group’s present investment in the UK to get a workable support from the government for sustaining operations in that country.
The company is in conversation in both Netherlands and the UK for support in decarbonisation initiatives. The situation in Netherlands is different because the cash flows are strong except for the last two quarters.
TV Narendran, Managing Director, Tata Steel, told businessline that the company is working closely with the government in Netherlands.
In the UK, the cash flow in the business cannot support transition and it needs government support.
“The conversations with the UK government have picked up pace. It is more deep and more frequent. In the next few months, it will reach a stage where both the company and government will agree on the way forward,” he said.
Support from the government is needed as some of the key facilities are “nearing end of life,” he added.
Tata Motors’ investment
Asked whether the $5-billion investment by Tata Motors to set up a EV battery facility will help get support for Tata Steel, Narendran said, “I think both these conversations are going on parallelly. Obviously, the UK government realises that the Tata Group is one of the biggest investors and employers in the UK because we have Jaguar Land Rover, Tata Chemicals, Tata Steel, TCS and Tata Consumer Products.”
The group has lot of investment already in the UK and so the conversations are going on multiple subjects at the group level and obviously Tata Steel will try to leverage that relationship to get the best deal, he said.
On whether the UK operations need support from India business, he said if the support from the government comes through, then it becomes a sustainable business and there is a case for investment.
“It is a bit early to give the specifics because the UK business, as it is, is costing us money. Obviously, status quo is not an option, as the existing assets are coming towards the end of life,” he said.
“If we do not invest anything, we have to start closing the assets anyway next year or so, as some heavy-end assets are nearing end of life. In the transition process, some of the heavy-end will get replaced with new assets and the production will become sustainable,” he added.