British steel industry dubbed 'underinvested' and 'undermanned' as ray of light shines on Scottish plants

Protests at Port Talbot
Protests at Port Talbot
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Britain's beleaguered steel industry has been dubbed "underinvested" and "overmanned" by the former boss of Tata Steel - as a ray of light finally shone as two Scottish steel works were handed over to a new owner.

Former chairman Ratan Tata, who retired in 2012 after helping the company achieve vast growth, has defended the decision to sell the firm's UK plants by the Indian firm, the Financial Times reported.

He said cuts would be necessary to make the Port Talbot steelworks profitable, but it was possible.

The comments are Mr Tata's first intervention since the firm announced it was selling its loss-making UK business, which include plants in Rotherham, Stocksbridge and Redcar.

Negotiations over the sale of the plant in Port Talbot, which employs around 4,000 workers, have been taking place for several months, well before Tata's announcement last week.

Speaking in Washington at a US Export-Import Bank conference, Mr Tata said the "bottom just opened up" at the UK steel operations, following a rise in exports by Chinese steelmakers after demand from their domestic market slowed.

"Right now the problem is that the English facilities are underinvested (and) overmanned," said Mr Tata.

He added that a potential buyer at Port Talbot would need to "cut back on the size and the scale of the operations and make them profitable".

This, he said, was "extremely challenging" but not impossible.

His comments come as his former company looked set to hand over the keys of two Lanarkshire steel plants to metals firm Liberty House, six months after announcing the mothballing of the sites with the loss of 270 jobs.

The handover ceremony comes amid continuing uncertainty for workers at the UK's largest steel plant in Port Talbot, South Wales.

The sale process for the giant Tata works is due to start on Monday and steelworkers await a buyer stepping forward to secure their jobs.

Workers at the plant said on Thursday they were ''encouraged'' about efforts to save their jobs after hearing from the UK Business Secretary that Tata is planning to act responsibly over the sale of its UK assets.

Sajid Javid flew back from a meeting in Mumbai - at which he pressed Tata officials for more time over the sale of its steel plants - to spend hours at Port Talbot in talks with unions and staff.

He cut short the trip to visit Port Talbot amid union claims he had ''taken his eye off the ball'' as the UK steel industry crisis deepens.

Mr Javid had been in Australia on a business trip when the steel firm made the shock announcement it was selling its loss-making plants just over a week ago.

The handover ceremony at the Dalzell works on Friday is a rare moment of good news in the struggling industry, and will be attended by Scotland's First Minister Nicola Sturgeon.

The plants - Dalzell in Motherwell and Clydebridge in Cambuslang - were secured last month in a ''back to back'' agreement, involving the Scottish Government buying them from Tata Steel, and immediately selling them on to Liberty.

Senior Liberty figures will meet remaining Dalzell workers and Tata Steel representatives to formally hand over the keys to the sites.

A Liberty banner will be unfurled from the plant's water tower.

Management and workers will hold a private lunchtime celebration to mark the planned re-opening of the sites.

A Scottish steel taskforce was established to secure jobs and the future of steel manufacturing in Scotland after Tata announced 1,200 UK job losses in October.

Sanjeev Gupta, executive chair of Liberty House Group, said when the agreement was reached on March 24: ''This agreement saves two great facilities in Scotland.

''Now we must turn our attention to restoring these businesses to their former glory, steadily rebuilding their skilled workforces and customer base."