Embattled British Steel finds Chinese buyer securing 3,200 jobs
British Steel has been bought by the Chinese firm Jingye Group, securing around 3,200 jobs in the process albeit with around 450 employees facing redundancy.
Jingye Group, which already makes steel in its home country, said it would invest £1.2bn over 10 years to modernise British Steel sites and boost energy efficiency. The company initially agreed to purchase the company in November 2019 for £70m.
British Steel was founded in 2016 from the ashes of Tata Steel after years of difficult conditions for the sector because of reduced demand for the metal following the 2008 global economic crash and tough competition from Chinese manufacturers.
Greybull Capital purchased the assets and ran the firm for three years until last year when it fell into liquidation and the Official Receiver took control. Greybull blamed the collapse on Brexit.
Jingye Group will now take control of British Steel’s UK and Netherlands assets from the Official Receiver, which includes steelworks at Scunthorpe, Skinningrove and on Teesside, as well as subsidiary businesses TSP Engineering and FN Steel.
Prime Minister Boris Johnson said: “The sounds of these steelworks have long echoed throughout Yorkshire and Humber and the North East. Today, as British Steel takes its next steps under Jingye’s leadership, we can be sure these will ring out for decades to come.
“I’d like to thank every British Steel employee in Scunthorpe, Skinningrove and on Teesside for their dedication and resilience which has kept the business thriving over the past year. Jingye’s pledge to invest £1.2bn into the business is a welcome boost that will not just secure thousands of jobs, but ensure British Steel continues to prosper.”
The group bought the business from Government liquidators, after ministers promised to fund the company following its collapse last year.
Jingye plans a number of initiatives including developing the electric arc furnace in Teesside, constructing a new 250MW power plant to serve the Scunthorpe site, and investing in rolling mills to produce high-quality steel products.
The number of people employed in UK steel manufacturing has fallen dramatically since 1971, from around 310,000 to just 10,000 in 2019.
Business Secretary Alok Sharma, who visited British Steel’s Scunthorpe site on Monday, said: “The sale of British Steel represents an important vote of confidence in the UK’s steel industry. It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production.
“I would like to pay tribute to everyone who has been involved in getting this deal over the line, in particular to British Steel’s workforce for whom I recognise the uncertainty will have been challenging.
“I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on-the-ground support and advice to those affected.”
Roy Rickhuss, general secretary of the steelworkers’ trade union Community, said: “It has been a long and difficult journey to get to this point. In particular, this acquisition is a testament to all the efforts of the world-class workforce, who even through the uncertainty, have broken production records.”
UK Steel’s director general Gareth Stace said: “After almost a year of huge uncertainty, punctuated by numerous setbacks, to have completed the sale of British Steel to a long-term investor with a positive and ambitious plan for the future, is a hugely significant accomplishment and one the Government must be congratulated on.”
Last year, a £35m research network was set up to develop new technologies to lower carbon emissions in the UK’s steel sector.
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