The Shotton plant employs more than 800 workers Tata Steel has announced 180 jobs are to go at its plant in Shotton, Flintshire.
Staff were told its Living Solutions arm, which makes panels for commercial buildings, will close as Tata concentrates on core business.
Living Solutions was set up in 2003 so former owners Corus could diversify but it has never been profitable.
Tata blamed a weak building industry and the end of a defence supply contract.
The company stressed Living Solutions’ closure would not affect the rest of its operations, with 800 people employed at Shotton.
“I hope this is not a sign of things to come”
Peter Hughes Unite union
Andrew Black, managing director of Tata Steel Building Systems, said the decision was taken “with great regret” after a detailed review, and blamed the “continuing weak construction market” and the end of a long-term contract to supply accommodation for the defence industry.
“Living Solutions has been unable to establish sufficient market presence to justify continuing with the business, which has never been profitable,” said Mr Black.
“Clearly this is a very difficult time for our colleagues at Living Solutions and I would like to pay tribute to everyone who has worked so hard to try to develop this business venture.”
He said the modular buildings sector was “highly competitive” and the company had already tried to address the problems by cutting costs but there were “no prospects of generating viable new business”.
The company has supplied buildings for an upgrade of Ministry of Defence garrisons at Aldershot and around Salisbury Plain as part of a six-year £92m contract.
Tata Living Solutions has been helping refurbish Army accommodation as part of a £92m contract Peter Hughes, of the Unite union, said he had heard rumours about possible job losses, but the union had not been involved in any talks.
He said: “I hope this is not a sign of things to come. Our concern would be that that part of the site was bringing in a lot of income.
“The worry now is that the rest of the site will have to absorb the costs of the site.”
Unite represents about 450 of Shotton’s 800 workforce.
Mr Hughes said most of the staff losing their jobs were taken on as new employees when Living Solutions was launched.
The Idian steel-maker Tata bought Anglo-Dutch firm Corus in a £4.3bn ($8.1bn) takeover in 2006.
When it opened, Corus Living Solutions was seen as a way for the steel-maker to branch out in the future.
In 2004, Edwina Hart, then minister responsible for social housing, claimed the company’s steel-framed units could help ease a housing shortages in Wales.
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