Severfield show of steel in 'trough'

The Thirsk-based firm, which is battling through a "trough" year for the sector, said demand and pricing in the UK and Ireland were poor.

However, Severfield said its trading so far this year remained in line with expectations.

The company's order book has grown to 241m, up from 219m a month ago. The group has won work in a number of sectors, including a contract in connection with the new Terminal 2 building at Heathrow airport, which will see steelwork delivered to the site between summer 2010 and spring 2011.

"In growing its UK market share, the company is demonstrating its relative competitiveness and financial strength in particularly harsh times for the industry," said the group.

"The company remains well positioned for the challenging market conditions through 2010 in the UK, and is prepared and looks forward to growth through its joint venture in India."

It hasn't won any more export business, but the company said opportunities remained, particularly in infrastructure markets.

Severfield said that steel prices will continue to rise this year, due to raw material cost increases and it has taken steps to reduce the impact of this.

Its structural steel joint venture in Bellary, India is a few months from production and remains on time and on budget.

The joint venture in India should produce 35,000 tonnes of steel annually when it reaches full capacity.

This will target a 100bn construction market, which is growing at about nine per cent annually.

The group hopes its expertise in working on high rise schemes, big retail developments and power stations will prove invaluable.

The group's second joint venture, to design, manufacture and install metal deck flooring, will also start operations in the summer.

In March, Severfield underlined the size of the challenge facing the UK construction industry as it warned of two years of pain in the structural steel market.

The group said it believed the market will reach its nadir – or lowest point – this year, and next year will only see a mild recovery.

Over the past year, the group has worked on a number of high-profile projects including the Shard of Glass skyscraper in London, and the 2012 Olympic Stadium.

To compensate for the fall-off in big projects, Severfield has been targeting smaller jobs, to help it win market share.

It is best known for specialising in projects involving thousands of tonnes of steel. Recently it has also been pricing jobs as small as 500 tonnes.

The group reduced its capacity by 20 per cent last year and cut its workforce by 15 per cent, to leave it with about 1,040 staff.

Taking a global path

Severfield-Rowen, which dates from 1978, has grown to become the

largest structural steelwork contractor in the UK.

Its recent sporting projects have included completing the OCS Stand for Surrey County Cricket Club.

It is also supplying steel to the 2012 Olympic Stadium in London.

The company has provided the structural steel for the folding fabric concertina on Wimbledon Centre Court's retractable roof.

It has continued to expand overseas. Last year Severfield opened a project office in Abu Dhabi.

In November 2008 a joint venture agreement was signed in India with JSW Building Systems, a subsidiary of JSW Steel, to create a structural steelwork business based in Bellary and Mumbai, India.