AFTER an incredibly tough five years, it appears that Yorkshire’s structural steel industry is finally emerging from the gloom of redundancies, high profile departures and troublesome multi-million pound contracts.
In a renaissance of the sector, Severfield and Billington Holdings are emerging bruised and battered from the worst slump in the structural steel industry in living memory, but at least they survived.
The pick-up hasn’t been as quick as they hoped it would be, but contractors are returning to quality over value, which will stand both firms in good stead.
Having survived the slump, while many rivals fell by the wayside, both companies are set to reap the benefits of the economic recovery when it does finally arrive.
Shares in Barnsley-based structural steel group Billington Holdings shot up 18 per cent on Tuesday on the news that it will beat full-year expectations following a doubling in half year profits.
The company, which supplied the steel for the Royal Shakespeare Company’s award-winning Stratford-upon-Avon theatre, said the first half of 2014 showed “real signs of improvement” in the structural sector and it believes its specialist divisions will show similar improvements in the second half.
Billington’s finance director Trevor Taylor said that after years of seeing contracts go to players that were willing to slash prices (many of whom have since gone bust), contractors are now looking for the best supplier for the job – not who’s got the cheapest price. Billington, like other structural steel firms was hit hard during the downturn, but while many failed, Billington managed to survive after a restructuring that included 85 to 100 job losses, which represented 25 per cent of the workforce.
In an interview with The Yorkshire Post today, Britain’s biggest steelwork contractor Severfield said it “is getting its mojo back” after a torrid time.
The Thirsk-based structural steelwork fabricator underwent a major re-structuring last year after axing its former chief executive Tom Haughey and launching a review of contracts after overshooting its budget on a major London skyscraper. Severfield swung from an anticipated profit to a £10m loss on its contract to design, supply and erect steel at 122 Leadenhall Street, also known as the Cheesegrater skyscraper.
Now under new management, Severfield has emerged leaner, fitter and ready to reaffirm its position in the market.
The group has branded under one name, getting rid of the four confusing names it used to have, and is now setting its sights on expansion overseas.
The group has taken on work in Amsterdam and Paris and is now looking at exporting Yorkshire expertise to other areas in Europe.
Chief executive Ian Lawson, who joined the group 10 months ago, said: “On the jobs we’re working on in Europe, we’ve fabricated the steel in Yorkshire.
“It’s our own erection labour that has gone from Yorkshire to Amsterdam and Paris.”
Once again pride appears to be returning to the Yorkshire steel sector.
That said, there will be hurdles to overcome.
Billington is warning there will be an industry-wide shortage of skilled labour unless manufacturers step up their apprenticeship schemes.
After downsizing its workforce during the slump, Billington is now employing new people as it reports its strongest order book in five years.
Chief executive Steve Fareham warned: “The industry-wide issue is a lot of people have come out of the industry and won’t be coming back. There will be a skills shortage.“
Billington has taken on just short of 20 apprentices working across the business from factory floor to project management and is now looking to fill another five positions.
It’s been a tough five years, but with young people returning to the industry, there is hope once again for the region’s steel sector.