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Deliverance as buyer awaits top steel plant.

Byline: Graeme King

THE future of the steel industry in the North East appears to have been secured with the news that the Corus plant on Teesside is to be sold to a new owner.

On a day when the giant Indian-owned company announced 3,500 job losses globally, the 2,000 staff at the Teesside Cast Products (TCP) Redcar plant were relieved to be spared, though up to 47 jobs are to go in the related Corus Northern Engineering Services (CNES).

There was positive reaction on Teesside yesterday, with those who have supported the steel industry in the area pleased it is sufficiently successful to have found a buyer - though no deal is expected to be completed for many months yet.

The move to a sale will guarantee jobs at the Redcar plant for the foreseeable future, managing director Jon Bolton said yesterday.

He said steel slab production would "absolutely" remain on Teesside and added: "Although we can never guarantee jobs, ultimately this is positive news. From being in a situation in 2003 of being a non-core asset, this means we become a strategic part of another company." Corus is to dispose of most of its 100% stake in the Redcar plant, which it took over from British Steel in 1999.

The firm has not identified the buyer, but it said the sale was closely linked to negotiations begun last year on extending a consortium deal with five key customers, which in effect secured the plant's future until 2014.

Mr Bolton said selling the plant had been on the table since last year, when the consortium talks opened.

"We have been holding a strategic review all the way through 2008. We put certain investment plans in front of the consortium that would have meant looking beyond the existing agreement," he said.

He said the plant's success in focusing on specialist steel markets, which saw it become the world's biggest exporter of steel slab last year, had been crucial to the sale.

"The focus that we have had has been the right one and the achievements that we have made over the last four years have been received well by the consortium."

He said while the new owners could not give guarantees about future staffing, there would be no impact on jobs as part of the 2,500 cuts announced by Corus. Besides the announcement on Teesside yesterday, Corus said it would mothball its hot strip mill at Llanwern in South Wales and restructure its engineering steels businesses, which will affect factories including Rotherham in South Yorkshire.

The group said a comprehensive range of redundancy packages and help for workers leaving the company would be made available. Chief executive Philippe Varin said: "The structural changes we are proposing today have been carefully considered.

They are essential for the future of the business.

"The company will keep its focus on priority areas such as training, research and product development, which, together with today's initiative will ensure Corus is in the best possible shape to compete strongly in the future."


GEOFF WATERFIELD, Teesside Works multi-union committee chairman, said: "Potentially this is a real opportunity for us."

He said if the sell-off brought investment - in particular to reline the Redcar blast furnace - it could secure steelmaking on Teesside for many years.

"It could mean another 10, 20 or 30 years of steel making on Teesside. But we need to find out the detail of the deal. We are also still very concerned about the 47 jobs that will be affected."

Stockton South MP Dari Taylor said: "This is a much more positive outcome than we at first thought.

"I don't want to think about it if Teesside had lost those jobs.

"We fought so hard in 2003 to save the steel industry on Teesside and it is such a relief that these jobs are not going. As it is, 47 jobs lost means 47 families suffering."

George Dunning, leader of Redcar and Cleveland Council and a former steelworker, said: "Whilst on the face of it, we on Teesside appear not to be hit too hard with job losses, employees of Teesside Cast Products must be wondering who will be taking over their part of the steel process.

"We will be looking at the implications of these job losses for our steel industry. I am sure everyone will agree that with a diminishing UK steel base no plant can operate in isolation.

"I believe we will come out of this worldwide recession and companies who have held on to their skilled staff will be better placed to take advantage of the upturn."
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Publication:The Journal (Newcastle, England)
Date:Jan 27, 2009
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