Capacity leading investment by Tata Steel

The Manufacturer reports that Tata Steel, Europe’s second largest steel producer, has opened the UK’s largest steel profiling plant, near Wolverhampton.  This £3.1 million investment is a good example of a capacity leading decision (see pages 192-193).   Tata Steel’s MD is quoted as saying:

“We were in a position where we were full in our previous position in Cradley, and while being full in a recession is a good place to be, equally you know that when things start to improve it’s going to test you and you’re going to be struggling.  We’ve created 50 per cent more head room [in the new plant]. We are not going to suddenly fill that overnight, however we’ve created that headroom to be able to grow as the market recovers and also we would expect that would get us some extra share as well.”

Consolidating production from two smites onto one also means the operation is likely to benefit from economies of scale.

This entry was posted in Chap 07 Capacity and demand, Sector: Manufacturing and tagged , . Bookmark the permalink.

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