Tata Steel Shotton works in Flintshire set for £7m investment

image captionThe Tata plant in Shotton colour coats steel for use in buildings such as Cardiff's Millennium Stadium

Tata Steel is set to invest £7m in a new generation of steel coating equipment at its Shotton works in Flintshire, BBC Wales understands.

The decision comes despite uncertainty over the long-term future of the company's UK business.

The company said Shotton would be spearheading a drive to create the next generation of products, but described the £7m figure as "speculative".

Economy Secretary Ken Skates said it was "very welcome news" for the area.

The steel finishing and coating works at Shotton employs 700 people producing a range of metal products for the construction industry, including cladding and insulation panels.

The plant, which uses steel produced at Port Talbot, has been described as one of Tata's only profitable sites in the UK.

In March, the Indian-owned company revealed it was considering the sale of its entire UK operations, prompting fears for the future of thousands of jobs.

A Tata Steel spokesman said: "The Shotton works will be spearheading a drive to create and bring to market the next generation of building envelope products.

"These will meet all current and planned future legislation and continue to provide our customers with the products they need."

A formal announcement confirming details of the investment is expected shortly.

Reacting for the Welsh Government, Mr Skates said: "This investment, and the commitment it shows the plant and its workforce, is very welcome news for the area.

He said it "follows the proactive action that Welsh Government has been taking with Tata over many months to help secure a sustainable future for steel making and steel jobs in Wales".

"We continue to hold constructive discussions with Tata management about the future of their UK operations and remain focused on doing all we can to support our plants, steelworkers and the communities that rely on them," he added.

Officials from the local branch of the Unite union said the investment "clearly demonstrates that the commitment and hard work the employees continually put into Shotton Works is noted at the highest level within the wider Tata company".

"It also reinforces Shotton's position as a world leader in our market, and demonstrates that through a modern differentiated products business model. with a dedicated and skilled workforce, historic steel plants can have a successful and viable future even during extremely challenging times," they added in a statement.

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