British Steel lands major German rail contract

Following a seven figure investment last year to enhance its manufacturing capabilities in Scunthorpe, British Steel has been able to land a deal which will see the company deliver around 20,000 tonnes of 120 metre rail a year to Deutsche Bahn, Europe’s largest purchaser of rail.

The firm spent £1m enhancing its Scunthorpe Rail and Section Mill so it could manufacture this longer-length rail.

As well as the Deutsche Bahn agreement, the new 120 metre rail capability allows improved competitiveness for British Steel in the wider European market.

Peter Smith, British Steel Managing Director Rail, said: “Supplying a new product to a major railway company like Deutsche Bahn is a significant achievement and demonstrates our commitment to product and service innovation.

“It also shows how increasing our product range can help us enter new markets, and how we can work in partnership with customers to become the strategic supply chain partner of choice.

“While we’ve worked with Deutsche Bahn in the past, this is the first contract we’ve been awarded by them as British Steel and we hope this is the start of a long-term relationship between our businesses.”

Before the investment, the longest rail British Steel could produce was 108 metres – a standard length in the domestic market.

However, many European rail networks are based on lengths of 60 and 120 metres.

While some European customers accept 60m lengths, that can be welded into 120m, most would prefer to minimise the number of welds and so they favour 120m rolled length.

Mr Smith said: “Our technical teams continue to deliver longer in-service product life along with reduced maintenance and renewal costs, bringing significant benefits to our customers.

“Deutsche Bahn is by far the biggest purchaser of rail in Europe. Having a stake in the German market is strategically important to us and we hope to build a strong and lasting relationship with them.

“The investment allows us to remain at the forefront of rail production and act as a catalyst for further long-length rail exports into Europe.”

British Steel supplies rail across the globe from its rolling mills in Scunthorpe and Hayange and the company has also established a successful rail logistics hub in Lecco in northern Italy.

The initial contract is for 21 months and will see the new 120 metre length rails delivered to Germany through the Channel Tunnel.

The requirement for shorter lengths such as 60 metres will be satisfied from both mills.

The first 120 metre shipment is due this month.

Mr Smith added: “Our engineering and development teams have performed an excellent job in expanding our manufacturing capabilities, ensuring our rail products and grades can continue being precisely matched to track conditions, track types, environmental conditions and a host of other variables.

“This ensures every rail we deliver provides optimum performance throughout its life, guaranteeing our customers – and their customers – a first class service.”

The deal is the second major international contract that British Steel has announced this year.

In January it announced that it would be providing assistance with the construction of the world’s largest cargo port in China, supplying crane rails for the Yangshan deep water facility, a £57 billion project near Shanghai.

Under the terms of the deal, British Steel has already supplied 4,650 tonnes of special profiles for the Yangshan development with a further 3,000 tonnes to follow for the next phase. The steel is made at the company’s Scunthorpe works before being rolled at its Special Profiles business in Skinningrove, Teesside.