Billington takes new track in bid to see off slump

0
Have your say

DIVERSIFYING into rail and energy is helping Billington Holdings combat the steel sector’s deep slump.

The group said “sensible” pricing is also starting to return to the structural steel sector after a spell of “suicidal” pricing by competitors.

Barnsley-based Billington said its prospects have improved in recent months, with contracts to improve access at a railway station and supply steel for a waste-to-energy scheme in Lincolnshire.

“I’m not getting too excited at the moment but for the first time in two to three years we’ve got work in (our subsidiary) Billington Structures booked into the first and second quarters next year,” said chief executive Steve Fareham.

“Things are a little bit better. We’re in the process of our first job in the rail sector with C Spencer.

“We’re starting to see a little bit of success moving away from the conventional building environment.”

The contract with Hull-based engineering and construction group C Spencer involves producing 130 tonnes of structural steel for Thornton Heath rail station in Croydon.

This includes bridge sections weighing around 16 tonnes each, as well as stairs, lift shafts and canopies. The work is going through Billington’s factories and work to install the steel will begin in January. Billington must install the main sections during a 51-hour window when trains will be diverted.

The company is hopeful of winning more work on Network Rail’s Access For All programme, and Mr Fareham said it is close to finalising another rail contract with a different contractor.

“There’s still a lot of activity there,” he said. “We’re putting a fair bit of time and effort in talking to the contractors that operate in that sector to see if we can bring any of our experience and skills to them. It’s early days but the first project is very substantial.”

The group’s steel staircase division, Marshall Steel Stairs, recently won a contract to supply a new waste-to-energy plant in Lincolnshire. Working with Clugston Construction, it is due to be completed in early 2013.

Mr Fareham added that the group’s hoardings division, Hoard-it, is growing rapidly, and it plans to make a number of promotions. “We can see a situation where we can definitely grow that particular business and we’ve not got enough people to meet the current needs,” he said.

Hoard-it accounts for six to seven per cent of group revenues and Billington hopes to turn that into double figures next year.

It is also recruiting another six apprentices as its latest batch complete their training.

Billington’s recent turn of fortunes comes despite a steel sector which has been cutting capacity and scaling back in recent years as a slump in major projects reduces demand.

Last week Indian steel giant Tata said it was cutting 900 jobs – including 155 in Yorkshire – and closing 12 sites under plans to improve competitiveness.

Tata said demand for steel in Europe had fallen by 25 per cent since 2007 and is forecast to slump by another 10 per cent this year.

Most of the job losses will be in South Wales, including 500 at the Port Talbot plant, under restructuring of management and administrative posts.

Billington made 85 redundancies during the first six months of the year, leaving the group with 320 employees. It also switched from double-shift to single-shift operations at its factories in Barnsley and Bristol.

Mr Fareham said recently improved trading was a result of its own self-help measures rather than any general market upturn. He added that conventional work in retail sheds and multi-storey projects remains scarce.

“People are still trimming back but there’s a bit more sense and reason that’s crept back,” said Mr Fareham.

“We’re seeing slightly less suicide bidding. There’s more of a balance coming back in but there’s still over-capacity.”

john.collingridge@ypn.co.uk