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U.K.’s Second-Largest Steelmaker Closing English Steel Works
09/28/2015 - Thailand’s Sahaviriya Steel Industries (SSI) said it will mothball its Redcar steel works in Teesside, England, and lay off approximately 1,700 employees -- most of its workforce.
In announcing the decision, the company said that it had no other option, given market conditions.
"This decision has had to be taken against a continuing background of poor steel trading conditions across the globe and the consequential severe deterioration in steel prices experienced during the course of 2015, together with the view that this is unlikely to change in the short term,” the company said in a statement.
"We will continue to work with various stakeholders, including government, with the objective of restarting operations at Teesside at some point in the future.”
A power plant and coke ovens at the plant are to continue to operate.
SSI UK is Britain’s second-largest steelmaker, next to Tata Steel. SSI acquired the ailing facility from Tata in 2010.
SSI has been impacted by slumping steel prices and debt – the company has missed debt repayments, and it is now working with three of Thailand’s major banks to restructure US$1.4 billion in loans, according to Reuters.
Government officials and labor leaders said the closure of the integrated steel works is a significant blow to Britain’s steel industry and to the region in which it is located.
"The future of British steelmaking is at a crossroads. At a time when competitor nations are spending heavily on helping their energy-intensive industries to become greener, companies in the U.K. are being forced to pay huge costs,” said Frances O’Grady, general secretary of the Trades Union Congress, in a statement.
Gareth Stace, director of UK Steel, a trade association, said news of the closure is “terrible and distressing.”
“We’ve called for an emergency summit with government to look at what more can be done to support the industry. We’ve enjoyed a lot of tea and sympathy but this summit needs to result in concrete action and support from ministers to reassure the industry and help support its long-term future.”
Member of Parliament Anna Turley, a Labour party member, said the announcement is devastating and called for government intervention.
“It is now the government’s duty to step in and secure our steel works, preserving the integrity of the blast furnace so that steelmaking is not gone for good,” she told The Guardian newspaper.
“The plant is a national asset and must be rescued and protected. Wages and pensions must be paid, and suppliers must be underwritten. The industrial marvel that is Redcar blast furnace cannot simply be allowed to fall over.”
"This decision has had to be taken against a continuing background of poor steel trading conditions across the globe and the consequential severe deterioration in steel prices experienced during the course of 2015, together with the view that this is unlikely to change in the short term,” the company said in a statement.
"We will continue to work with various stakeholders, including government, with the objective of restarting operations at Teesside at some point in the future.”
A power plant and coke ovens at the plant are to continue to operate.
SSI UK is Britain’s second-largest steelmaker, next to Tata Steel. SSI acquired the ailing facility from Tata in 2010.
SSI has been impacted by slumping steel prices and debt – the company has missed debt repayments, and it is now working with three of Thailand’s major banks to restructure US$1.4 billion in loans, according to Reuters.
Government officials and labor leaders said the closure of the integrated steel works is a significant blow to Britain’s steel industry and to the region in which it is located.
"The future of British steelmaking is at a crossroads. At a time when competitor nations are spending heavily on helping their energy-intensive industries to become greener, companies in the U.K. are being forced to pay huge costs,” said Frances O’Grady, general secretary of the Trades Union Congress, in a statement.
Gareth Stace, director of UK Steel, a trade association, said news of the closure is “terrible and distressing.”
“We’ve called for an emergency summit with government to look at what more can be done to support the industry. We’ve enjoyed a lot of tea and sympathy but this summit needs to result in concrete action and support from ministers to reassure the industry and help support its long-term future.”
Member of Parliament Anna Turley, a Labour party member, said the announcement is devastating and called for government intervention.
“It is now the government’s duty to step in and secure our steel works, preserving the integrity of the blast furnace so that steelmaking is not gone for good,” she told The Guardian newspaper.
“The plant is a national asset and must be rescued and protected. Wages and pensions must be paid, and suppliers must be underwritten. The industrial marvel that is Redcar blast furnace cannot simply be allowed to fall over.”
