Steel firm in loans row delays nuclear expansion

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SHEFFIELD Forgemasters has put its nuclear expansion plans on hold, blaming industry safety reviews, advances by Chinese rivals and rising costs.

Managing director Graham Honeyman told the Yorkshire Post that he has decided to delay the project until next year amid mounting speculation that Forgemasters was targeting the Government’s £1.4bn regional growth fund for support.

The privately-owned company became a political cause celebre after the coalition Government cancelled an £80m loan promised by Labour Ministers.

The funding was a vital contribution to the £160m plan to build a 15,000-tonne forging press, which would have placed the South Yorkshire business at the top of the supply chain for the next generation of nuclear power stations.

Coalition Ministers have since made conciliatory moves towards the company and last night Business Secretary Vince Cable reiterated his support.

He said: “We understand that Sheffield Forgemasters is currently re-examining its business plan over the next few months.

“As an award-winning manufacturer supplying some of the largest precision forgings and castings in the world, the Government will continue to talk to Forgemasters about its plans for growing its business.”

Dr Honeyman is reviewing the company’s strategy, although he remains convinced that a 15,000-tonne press is “right for the company and for the country”.

He said that forthcoming safety reviews following the Japanese nuclear disaster would not change UK policy on energy supply, but it made sense to halt work until these had been completed.

He also said Forgemasters had to assess developments made by competitors and account for price rises since the first loan bid.