Jingye Group To Acquire British Steel Assets
Contracts have now been exchanged between Chinese steelmaker Jingye Group and British Steel, with the agreement seeing both businesses combine to create a world-leading steelmaking group that will also help to secure a future over the long term for British Steel’s operations.
An agreement has been reached for Jingye to acquire certain British Steel assets, with the completed sale also ensuring the safety of thousands of jobs in what is a key industry for the UK.
The Chinese firm intends to invest £1.2 billion in the business over the next ten years to upgrade plants and machinery, helping to improve its environmental performance and prioritise energy efficiency.
This will ensure that operations are both more competitive and sustainable, with the company future-proofed thanks to investment in new markets and products as well.
Certain assets would be acquired by Jingye from the Official Receiver under the terms of the agreement, including the steelworks at Scunthorpe and mills at Teesside Beam Mill and Skinningrove. It would also assume control over subsidiary businesses British Steel France, FN Steel and TSP Engineering.
Li Ganpo, Jingye group chairman, said: “We are delighted to have reached this agreement. As a young company with large ambitions we have long admired British Steel and appreciate its illustrious heritage. We share with the thousands of British Steel workers a passion for this industry and we are determined that together we can transform this business.”
He went on to add that this is the start of a long road ahead and this is only the beginning of the hard work that will be required to breathe new life back into British Steel.
But this partnership will see a sustainable, profitable and powerful business created that will ensure the future of thousands of jobs and produce high-quality innovative steel products that are in demand around the world.
British Steel itself has had a rather difficult time over the years - and you can follow a timeline of its struggles over on the Financial Times website. A drop in demand and a global recession in 1970 had a huge impact on British Steel before privatisation in 1988, which saw it make a pre-tax profit of £733 million a year later.
In 1999, it merged with Koninklijke Hoogovens to create the Corus Group, which was purchased in 2007 by Tata Steel. In 2015, big plants in Scunthorpe, Redcare, South Wales and Scotland all closed, with employees voting to strike for the first time in 30 years over plans to axe the pension scheme.
2017 saw a return to profit for British Steel following losses of £79 million in 2016, but a year on the steel sector in the UK was faced with real threats from increased tariffs int he US. In April this year, it put in a bid for a £120 million loan from the government to help it meet a shortfall in credits owed to the European Commission for carbon emissions.
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