Jobs boost as £160m forging press gets backing

The investment will help Sheffield Forgemasters compete for major contracts to supply key components for the next generation of nuclear power stations, a market worth 40bn in the UK alone.

Business Secretary Lord Mandelson is set to announce today that the company will receive a government loan of 80m to help pay for the 15,000-tonne press and finishing workshop.

Westinghouse, the US nuclear reactor provider, has agreed to advance 40m worth of forward orders, while banks and private equity providers will make up the balance.

Lord Mandelson will say: "Forgemasters makes heavy-forged castings for advanced engineering projects – especially in the civil nuclear supply chains.

"There are just one or two other companies in the world with of the kind of capability the new forge will provide. And its availability in this country will boost UK deployment of new nuclear.

"It is brilliant news for the civil nuclear supply chain in Britain, and will help them compete against the best in the world."

The new forging press is expected to create 200 jobs on the Brightside Lane site and a further 200 jobs in the company's supply chain. Forgemasters believes that once operational, the press will double its turnover from 120m to 250m.

The company, which underwent a management buyout led by Graham Honeyman in 2005, will spend the next three to four months finalising the details of the funding package. Lloyds is likely to provide funding and the company is speaking to different equity providers about the remainder.

After these details have been finalised, Forgemasters will start

groundwork and ordering equipment for the new press.

Lord Mandelson will add: "We're reinforcing this investment with the creation of the Nuclear Advanced Manufacturing Research Centre in South Yorkshire, a strategy for building our nuclear skills base through the Nuclear Skills Academy in Cumbria and a comprehensive strategy for engaging UK small and medium-sized engineering companies in the huge opportunities in the nuclear supply chain.

"To me Forgemasters and the work we have done on the civil nuclear supply chain captures one of the basic approaches behind New Industry New Jobs. British industrial strengths and capabilities, rooted in technologies and skills, that would not be fully realised without a strategic approach from government.

"Expanding civil nuclear energy in Britain is not just a mechanism for cutting carbon emissions. It is a decision with huge implications for British supply chains, and it is vital that we think about that now, that we plan for it with business now. We have to see the big picture."

The nuclear industry in the UK directly employs around 24,000 with a further 20,000 in the broader supply chain. It has an annual market value of 3.6bn and around one third of this is attributable to exports. Around 53 nuclear reactors are under construction worldwide, with a further 136 planned.

First centre for ccs strategy

The Government is today set to announce its industrial strategy for carbon capture and storage technology.

Ministers will say CCS – which catches harmful emissions from fossil fuels and transports them offshore to store under the seabed – will be able to sustain 100,000 UK jobs by 2030.

They will identify Yorkshire and Humber as the UK's first low carbon economic area for CCS.

Ed Miliband, the Energy and Climate Change Secretary, said: "CCS presents a massive industrial growth opportunity for the UK. We have a strong, established and skilled workforce in precisely the sectors needed to get CCS deployed at scale. And we have some of the best potential sites in all of Europe for CO2 storage under the North Sea.

"Coal is the most abundant worldwide energy resource but it is also the most polluting, so there is no solution to climate change without CCS.

"Yorkshire and Humber is well placed to see the benefits from the jobs that investment in CCS can bring, other regions will too."