Welsh Valleys welcome £800m Tata boost

The Indian steel giant pledges massive investment across Wales. Cue jubilation in the Rhondda.

by Michael Northcott
Last Updated: 19 Aug 2013

Thousands of steel workers in Wales had their job security fears allayed today after Indian steel producer Tata revealed plans to spend £800 million at its plants in the country over the next five years. 

The news comes after Welsh First Minister Carwyn Jones met Tata’s bosses during his trade mission to India last week. Tata has been a real boon for Welsh manufacturing in recent times, with £240m about to be plunged into the new steel works at Port Talbot, including a new blast furnace and a major upgrade of the steel-making shop. There’s also talk of Tata throwing some cash at the Welsh coal-mining trade in the near future…

Tata is in the enviable position of having boot-loads of money to spend.  The company is India’s third largest car manufacturer by local sales, and has made extensive gains after its global vehicle sales rose by a quarter (26 per cent) to March 2012. Total revenue in the 2010-2011 year was $83.3bn (£52.6bn), up 23.6 per cent on the previous year.

And Wales does very well out of Tata’s millions. A study by Cardiff University (commissioned by Tata, natch) last month found that Tata and its supply chain supports 1.22 additional jobs for every direct employee in Wales, taking the total supported employment in the country to 18,000.

It is worth noting that the investment has come partly as a result of the rising price of steel internationally – China’s enormous demand for metals has driven prices up making it economical once more to produce steel in the UK. Notably, the blast furnace formerly owned by Corus at Redcar, was recently relit by new owners Sahaviriya Steel Industries (SSI) after having been taken out of service. But if there are any other major fluctuations in the price of steel (or China’s demand for it) then we could see the tide turn back the other way.

For the moment though, Wales’ steel industry is having a blast. Whilst it’s a shame that there are no major British companies in on the steel-making action, there’s no doubt that Tata is a positive influence on the Welsh job market. Evidence indeed that foreign investment could be a real driver in reducing our deficit, but then that’s why Cameron’s been out banging the drum on the other side of the globe, of course…

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