HIGH ELECTRICITY prices in the UK have contributed to a decision by Corus to cut 2,500 workers from its British plants in an effort to make the company more competitive, according to Philippe Varin, chief executive of the Anglo-Dutch steel producer.
Mr Varin said the short-term outlook for the steel industry in Europe was “bleak”, with demand from Corus’s main European customers halving in the past year and with its plants making roughly 30 per cent less steel than at the same time last year.
He said it was “plausible” that world steel demand would fall 10 per cent in 2009 compared to 2008, the biggest year-on-year decline in the industry since 1945.
The job cuts plus other savings were expected to reduce Corus’s operating costs by more than £200 million a year, Mr Varin said, with the savings going straight into earnings.
The company, owned by the Tata industrial group of India, had earnings before interest, tax, depreciation and amortisation of £915 million in the first half of its financial year to the end of September. However, profits in the second half were expected to be far lower because of the steep industry downturn.
The job losses come from a total UK Corus workforce of 24,000. – ( Financial Timesservice)
