Tata steel closure would tear hole in UK manufacturing supply chain

File photograph shows a union banner hanging from a fence in front of the Tata steelworks in the town of Port Talbot, Wales, Britain in this April 1, 2016 file photo. REUTERS/Darren Staples/Files

Britain's Business Secretary Sajid Javid talks to workers as he leaves the Tata Steel plant in Port Talbot, South Wales, April 1, 2016.-REUTERS/BEN BIRCHALL/POOL

BY ANDY BRUCE AND COSTAS PITAS-Sun Apr 3, 2016

The closure of Tata Steel's operations in Britain would leave a hole in manufacturers' supply chains, dealing a blow to thousands of smaller firms across the country and creating a logistical headache for the car industry.

India's Tata Steel, Britain's biggest producer, put all of its operations up for sale, including the country's largest steelworks at Port Talbot which is losing $1.4 million a day due to depressed steel prices and high costs.

As the government searches for a new buyer, some of Tata's customers are already looking for new sources of steel which is used in everything from car roofs to Heinz baked bean cans, cladding on Ikea buildings and some of the country's coins.

While bigger names have the luxury of a global supply chain to fall back on, smaller companies - which account for around 95 percent of British manufacturing firms - face a tougher task if Port Talbot in south Wales closes.

Tata sells around half of its products into the domestic market, the firm said in 2014.

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