Redcar steel plant to reopen under SSI
24 Feb 2011
London – Tata Steel UK Ltd has signed a definitive agreement to sell certain assets of Teesside Cast Products (TCP) to Sahaviriya Steel Industries UK Ltd (SSI), a subsidiary of Thailand’s largest steel producer. The deal, which values TCP at $469 million, is scheduled for completion by the end of March.
Assets covered by the sale include the Redcar Blast Furnace, the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, and the Lackenby steelmaking and casting facilities.
The deal will also result in Tata Steel and SSI entering into a joint venture to operate Redcar Wharf (TCP’s bulk terminal), giving Tata Steel the flexibility to use Teesside to serve its other steelmaking operations, while also meeting SSI’s requirements on Teesside.
Tata Steel will continue to operate two large-diameter tube mills in Hartlepool, the Skinningrove special sections mill, Teesside Beam Mill and Teesside Technology Centre.
The deal follows a 22-month search by Tata Steel to find a buyer for TCP, which closed after a consortium of offtakers had withdrawn from a 10-year supply agreement.
“I am very encouraged that after all our efforts we have been able to reach this agreement, which is good news for the highly skilled and dedicated Teesside workforce,” said Karl-Ulrich Köhler, MD & CEO of Tata Steel in Europe.
SSI president Win Viriyaprapaikit added: “This is a historic moment for both Teesside and SSI, one that would not have been possible without the local community’s passion for steel-making and the help of the UK Government. We look forward to resuming production of the top quality slab for which the plant is renowned as soon as possible.
“Owning Teesside Cast Products will enable us to achieve our long-standing ambition of becoming a fully integrated steel producer. This transaction will give us a strong platform for future growth, increase our resilience to industry cycles and give us opportunities to diversify into new markets and products.”
SSI’s takeover will see the former Corus steel making plant in Redcar, Teesside re-open under SSI management, creating between 600 and 800 jobs, according to trade union officials.
“GMB welcome the fact that there will be an announcement this afternoon that the steel making plant at Redcar is to re-open with the prospect of between 600 to 800 jobs in a hard pressed community that has suffered badly from the bankers recession,” said Jimmy Skivington, the union’s regional organiser for engineering on Teesside.
“The prospect of losing vital manufacturing skills built up over generations was a body blow to the area. It is vital that Redcar in particular and Teesside in general is not allowed to become a low wage low skill economy.
“We need a diverse range of skills indigenous to this area that are enabled, supported and invested in. That is why we welcome the prospect of over 600 skilled workers getting the chance once again to put their vital skills into practice.”
