Tata Steel UK CEO: British steel consumption at its ‘lowest since the Industrial Revolution’
Tata Steel UK CEO: British steel consumption at its ‘lowest since the Industrial Revolution’
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UK steel consumption is at its lowest point since the Industrial Revolution, according to Tata Steel UK CEO Rajesh Nair.
His comments come as the company is in the early stages of its transformation of its Port Talbot site, one of the largest industrial projects in the UK, which Nair says is progressing “pretty much to plan”.
Speaking in an exclusive interview with Businessin Wales, Nair outlined the company’s path through restructuring, decarbonisation, and the construction of a new Electric Arc Furnace (EAF) that will redefine steelmaking in South Wales.
Construction officially began on the new EAF in July, a move backed by a £500 million UK Government grant, bringing the total investment in the project to £1.25 billion.
The move is expected to secure 5,000 jobs across the UK and significantly reduce carbon emissions in Welsh steelmaking.
“The lowest point” for UK steel
Reflecting on the wider industry, Nair said the UK steel sector is currently at its weakest point since the Industrial Revolution.
“Frankly speaking, we are at its lowest, I think since steel originated here,” he said. “Even 20 years ago, we were at a much higher level. So, this is probably the lowest point of the steel industry in the UK.”
Transitioning to greener steel
The Electric Arc Furnace, a cleaner alternative to traditional blast furnaces, is expected to cut Port Talbot’s carbon emissions by 90%. The shift to greener technology also positions the UK steel sector as a potential global leader in sustainable steel production.
Nair described Tata Steel’s dual focus: winding down the traditional iron and steelmaking while simultaneously developing the new EAF project.
He praised the professionalism and care with which the wind-down has been handled.
“We’ve done pretty well in terms of safely and professionally winding down the old assets and also working with our trades union colleagues to make sure that all the people affected by the restructuring are treated well,” he said. “It’s gone pretty well to all of our satisfaction without any incident, either a safety incident or an environmental incident.”
In the meantime, Tata Steel UK has put in place a “re-roller business model” to maintain supply to customers by importing steel slabs of coil from other steelworks worldwide.
“We have really not let any of our customers down,” Nair said. “We had to find sources of nearly 3 million tonnes of steel to be used in our UK business… We’ve been able to work with partners to build the necessary infrastructure, to bring the steel in and then to transport all that steel from the ports to Port Talbot and to other sites across the UK.”
Building one of the world’s largest Electric Arc Furnaces
The construction of the EAF at Port Talbot is already well underway.
Nair revealed that about 400,000 tonnes of material have already been excavated from the site, with plans to reuse it in construction. Around 1,200 construction workers will be employed on-site at the project’s peak.
“Since we made the announcement, we have been able to place all our orders for the equipment with all the OEMs [Original Equipment Manufacturers],” Nair said.
“You would have seen the formal groundbreaking that happened, that was on the back of us getting our planning approvals in time.”
“It is probably one of the largest Electric Arc Furnaces being built at this point in time,” Nair said.
Managing job losses and supporting workers
The transition has come with significant workforce changes, a reality Nair described as emotionally difficult but necessary for the long-term survival of the UK steel industry.
“Nobody would like to have a transformation or transition which results in redundancies,” he said.
“But having come to the decision after all the evaluation, if it involves people, then it is about being absolutely empathetic and doing everything you can to make sure you manage the people who are affected in the right way.”
Nair said that of around 2,200 employees who have left the business, roughly 1,400 did so voluntarily, while compulsory redundancies were limited to just over 120.
Training, retraining, and voluntary furlough schemes have also been key to the company’s approach.
“We put in place a 12-month training programme for people if they were interested… Similarly, we created a furlough scheme for people who had skills in steelmaking,” he explained. “We tried everything possible to give people an opportunity to find another job.”
A vision for sustainable growth
Nair, who also serves as Chair of UK Steel, believes the Port Talbot project can help restore confidence in British steelmaking by proving that green technology and industrial growth can coexist.
“The fact that we are building an Electric Arc Furnace for flat products… will give us a much better level of sovereign capability to underpin UK manufacturing supply chains,” he said.
“At the same time, the discussions that are going on with respect to policy support and support in energy will help us to build the right level of competitiveness.”
He added: “This is probably a very good example of how sustainability, decarbonisation and circularity can go hand in hand with industrialisation.
“Very often people talk about decarbonisation meaning deindustrialisation. This could be a very good example of how decarbonisation can actually be a catalyst for industrialisation, in particular in the UK.”
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