2,000 jobs at risk as steel giant ‘misses debt payment’

The SSI plant at Redcar
The SSI plant at Redcar
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MINISTERS were urged to take action to preserve the UK steel industry today amid doubts over the future of a major North Yorkshire employer.

SSI, the Thai-based owners of the Redcar steelworks employing hundreds of staff, has been hammered by falling demand for the slab steel produced there, with prices for the commodity plummeting 40 per cent in the last year as a result.

SSI chief operating officer Cornelius Louwrens warned this summer that its “significant and substantial” losses could not be sustained.

While SSI has declined to comment, The Telegraph is reporting that the company failed to repay loans worth £80 million in June and was given a short-term stay of execution by lenders.

Redcar MP Anna Turley said: ““The crisis in UK Steel is becoming serious and the government must act now to save steelmaking on Teesside. I have been in daily contact with SSI and management at the site over the past few months keeping abreast of the difficulties being faced by the industry and have been working alongside colleagues in Parliament to lobby the government for support. I have met privately with the Minister for steel and asked urgent questions in the Chamber to press for immediate support.

“Our steelworks in Redcar sustains thousands of jobs and it is vital that these are protected. The government need to be stepping up to support the industry to help it weather the current storm. I asked the Minister for urgent action at Business Questions today and the debate on Thursday will be further opportunity to make our case to the government.

“We are looking for action on energy costs, business rates and imports, to level the playing field and improve UK steel competitiveness. We would also like to see a commitment to promoting local content and sustainable products in the UK supply chain and for the government to champion reform of European emissions trading to safeguard competitiveness.”

Ms Turley will lead a Commons debate on the future of the UK steel industry on Thursday.

A spokesman for the Community union, which represents the majority of the workforce, said: “We are fully aware of the difficult market conditions in which SSI UK is operating and the worries and concerns of SSI workers. The multi union reps on site at SSI are pushing for updates from management through their usual channels.

“While we appreciate the incredibly difficult market conditions faced by all UK steel producers, we believe that a lack of support from the UK government in vital areas such as energy, environmental and business taxes and procurement threaten the very future of the UK steel industry.”

“We will continue to communicate with our members as soon as information is received.”

Michael Blench, regional officer of the GMB union, said SSI is in a “very precarious” position, adding: “They are awaiting a decision from the main board on whether to keep Redcar as a going concern or whether to mothball it.

“It is an exceptionally worrying time for the workers.”

SSI took over the former Corus Teesside Cast Products plant in 2010 after it was mothballed, and is believed to have spent around £1 billion getting it up and running. The takeover deal valued the business at $469m (£291m).

The firm is a huge employer and there are fears that large-scale job cuts could have a devastating effect on the economy of the north east and North Yorkshire.

The Teesside plant has the second-largest blast furnace in Europe and slab production capacity of 3.5m tonnes per year.

The production facilities include iron- and steel-making and the infrastructure and logistics facilities required to support full production.