Forgemasters looking to double
earnings from nuclear projects

WHEN the coalition Government scrapped an £80m loan which had been granted to Sheffield Forgemasters in the dying days of Gordon Brown’s premiership, there were fears that Yorkshire might miss out on the spending spree linked to the global demand for nuclear power stations.

Now Sheffield Forgemasters is on course to double the amount of money it earns from nuclear projects and forge lucrative ties with a major manufacturing development which is planned by Rolls-Royce on Rotherham’s Advanced Manufacturing Park.

Forgemasters has passed an audit to retain its ASME status as a supplier of heavy forgings and castings for the civil nuclear power market. It now has its sights set on a higher honour.

As a result of the three-yearly audit, Forgemasters aims to secure an ASME NPT (Nuclear Partials) accreditation in early 2013, which means it will be the only UK producer of heavy forgings and castings allowed to weld and fabricate “safety critical components” at the heart of a nuclear power plant.

Peter Birtles, the group director at Forgemasters, which has 800 staff, said: “We’re in the process of upgrading to ASME NPT and should find out if we’ve got it by October. If we get it, it will increase our turnover because we will be able to make a wider variety of products.

“We would be able to do more work with Rolls-Royce, who have opened a base on the AMP in Rotherham, and we would also do more work in America and China.”

Rolls-Royce’s Advanced Blade Casting Facility (ABCF) is being built on the AMP, and is expected to produce its first blades in late 2014.

Apart from the blades casting facility Rolls-Royce has identified sites on the AMP for a factory to manufacture, assemble and test components for the proposed next generation of civil nuclear power stations, and a third, smaller factory which could house one of Rolls-Royce’s suppliers.

The AMP is home to world-class engineers who are helping to make Britain’s aero-engine industry more competitive. If Forgemasters secures ASME NPT status, it will sit alongside Rolls- Royce, which is a key customer, as one of a handful of UK firms qualified to carry out main component fabrication within a civil nuclear plant.

Mr Birtles said: “Our overall turnover is around £100m and nuclear accounts for less than 20 per cent of that. We could double our turnover from nuclear by adopting NPT.

“Soon the UK will be building new nuclear power stations and we want to play a part in that. If we gain accreditation from ASME NPT, our turnover could go up to £125m.

“The extent to which we will benefit depends on what types of reactors are put in. If the French designs are used, we will benefit, but not as much as we would if they use the AP1000 Westinghouse design.

“The AP1000 design was believed to be favoured by Horizon (Nuclear Power), who are proposing to build some nuclear power stations in the UK. Horizon is currently owned by German-based companies EON and RWE and is in the process of being sold. If the new owners of Horizon choose AP1000 we will benefit enormously.

“There are plans for between six and eight nuclear power stations in the UK, with the first one due for completion in 2018.

“They will all be built on the sites of existing nuclear power stations. They will be upgraded and made bigger.”

Mr Birtles added: “We are performing pretty well at the moment, but it’s a tough world out there. Our financial year finished at the end of June.

“Our turnover was similar to the year before and our profit was better. We have got a 12 month order book so we are pretty well placed. I have a lot of contact with most of our competitors and none of them appears to be making a profit.”

The heavy engineering firm was caught in an explosive political row in 2010 when the coalition controversially axed an £80m loan agreed with Labour Ministers before the general election.

The soft loan was to have helped fund a £160m project to build a 15,000-tonne forging press to manufacture components for the next generation of nuclear power stations.

In October 2011, the Government revealed it was offering a loan to Forgemasters as part of a £950m jobs-boosting package. At the time, Deputy Prime Minister Nick Clegg denied there had been any change of heart, after it was revealed that a proposed loan of as much as £36m had been earmarked for Forgemasters.

Looking back on the £80m loan saga, Mr Birtles said: “We have got on with life and moved on to other things immediately.”

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