UK steel firm Caparo Industries, which employs as many as 1,800 staff across 20 sites across England and Wales, is set to go into administration later on 19 October. PricewaterhouseCoopers (PwC) will make a formal announcement on Caparo's future.
Caparo has been hit by the collapse in the market price of steel. It has also been affected by the strength of the pound against the euro, which has made imports more expensive. Several parts of the UK, including the West Midlands where the firm is based, will be affected by the cuts, according to the Press Association.
It was previously reported that Tata Steel could cut up to 1,000 jobs at its Scunthorpe steel plant as part of its restructuring plan in the wake of the UK steel crisis, which has seen the industry face intense pressure in recent times due to cheap Chinese imports, higher energy costs compounded by environmental levies and the sterling's strength.
Caparo was founded by Lord Paul in the 1960s after he moved to Britain from India. It reported an annual operating loss of £700,000 (€956,684, $1.1m) for 2014 as compared to the previous year's profit of £3.1m. However, its UK operations posted much higher operating losses at £2.5m, compared to the £1.7m profit made the previous year.
The directors' report said: "The majority of the decline in underlying UK operating profits reflects the difficult trading conditions ... for the commodity-based businesses; these businesses typically perform better when steel prices are increasing. The second half of the year saw rapid falls in steel prices and adverse exchange movements."
Caparo also operates businesses in various verticals such as product development, materials testing services, hotels, media, furniture and interior design, financial services, energy and private equity investment.
IBTimes UK has contacted Caparo for a comment and is awaiting a reply.