Corus steel plant: Thai deal gives future hope
The Corus steel plant on Teesside that was mothballed earlier this year is set to be sold to a Thai company, with a senior source telling Channel 4 News that production could resume in weeks.
SSI, the biggest steel producer in Thailand, said it had signed an agreement with Corus, a subsidiary of Indian giant Tata Group to buy the plant.
The firm said it was finalising the details and arranging financing for the proposed deal, which is worth some £320mn.
A senior source told Channel 4 News: “This paves the way for a resumption of steelmaking on Teesside in the coming weeks and months.
“SSI is the perfect buyer because they currently do not make their own steel so Teesside is a good fit for them.
“We have been talking to SSI for a year now. We always said we were confident that we would find a buyer for Teesside.
“SSI want to make steel on Teesside – they do not want to sell off the plant.”
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The Corus plant in Redcar was partially closed when an international consortium suddenly walked away from a long-term contract to buy its products.
More than 1,000 workers at the Teesside Cast Products (TCP) site lost their jobs and there were fears that the plant would close altogether, leading to thousands more job losses across the north east of England.
Behind-the-scenes moves began this summer to sell the plant to SSI, with union leaders and local politicians visiting Thailand to meet company executives.
It follows a year-long search for a sustainable solution to the plant’s difficulties, during which the plant was wound down and eventually ceased operating in February 2010.
Corus blamed the slow progress in finding a buyer for TCP on its duty to sell the plant to a credible bidder with local politicians insisting that it must not be sold to asset strippers.
This task has been made harder by a surplus in steelmaking capacity almost everywhere in the world except India and by the high cost of importing raw materials into the UK and then exporting products overseas.
The previous government’s support for the local economy included announcing £60mn to create new Teesside jobs and to retain existing jobs in the area in December 2009 when Corus declared its intention to mothball TCP.
Other moves included holding a Parliamentary “steel summit” in May 2009, at which the UK steel industry put forward to the then Business Secretary Lord Mandelson the assistance it needs from government to tide it through the downturn.
Even after the cuts Corus remained one of the largest employers on Teesside with some 2,500 people working at various sites.
Win Viriyaprapaikit, president of SSI, said: “We have great respect for the tradition of steel-making on Teesside and for the highly-skilled Teesside workforce, having previously purchased slab from Teesside Cast Products.
“This transaction will enable SSI to fulfil its long-standing objective of becoming a fully-integrated steel producer with both melting and rolling facilities.”
Union officials warmly welcomed today’s “great” news.
Geoff Waterfield, Chair of the Teesside multi-union workers' committee at the Redcar plan told Channel 4 News:
"This region has been hit hard over the last few years and this new is very welcome. This is a new chapter for Redcar and we look forward to welcoming SSI to Teesside.
"It is not easy to say at this stage how many people will be able to come back to Teesside. I am sure there will be a good mix of new and old workers coming back but it's too early to say."
"We are 100 per cent confident about SSI 's intentions. They want to make steel here and we always said that Teesside had a future as a steel manufacturer and we have been proven right. This is a great day for Teesside. A new chapter."
