UK STEEL company Sheffield Forgemasters has become the latest company to cut jobs in the UK’s beleaguered steel industry, with 100 positions to go across all of its businesses.
The firm has just announced its latest financial results and said that for the first time, it has made a loss, and redundancies are necessary to ‘streamline’ the operation and make it more able to withstand the tough economic conditions facing the steel industry. Chairman Graham Honeyman said that he hopes the redundancies are a 'short-term necessity' and will largely be achieved voluntarily. Earlier this week, industry giant Tata Steel announced that it is cutting 1,000 jobs in the UK.
Sheffield Forgemasters makes, forges and casts steel for engineering, nuclear and oil industry applications as well as ingots and bars for other industries. Chairman Tony Pedder said that the downturn in the oil and gas industry is partly to blame, as the low prices are causing projects and investment to be delayed.
'This combined with a slowing of global economic growth has led to a scarcity of orders for our engineering products and an international collapse in steel prices, affecting our ingot and bar sales,' he added.
Honeyman said that despite being 'fiercely independent', the company felt compelled to ask the government to act to improve the competitive and market environment for UK steel firms.
'There has been some positive response particularly with regard to electricity costs for major users like Sheffield Forgemasters but more remains to be done,' he said.
The Unite union has called on the government to ensure that all UK infrastructure projects should use UK steel. National officer for steel Harish Patel said that the government needs to act 'swiftly and decisively' to protect the steel industry in the UK before it is too late.
'World class companies like Sheffield Forgemasters need urgent support and a level playing field with their international competitors if they are to survive,' he said, adding: 'If it’s made for Britain then it should be built using British steel. Firms such as Forgemasters should be looking forward to helping build the new gas and nuclear power plants which are in the pipeline, not left fighting for their survival on an uneven playing field.'
The UK government has yet to respond to the latest cuts, but on 19 January, it reaffirmed its support for the UK. Anna Soubry, minister for small business, industry and enterprise, told parliament that the government had already secured state aid clearance from Europe to compensate companies and help mitigate the costs of existing energy and renewables policies, which it estimates will save steel companies up to £100m/y (US$140m). The government, she said, will go further and exclude energy-intensive industries, like the steel industry, from such costs in the first place. She also said that the government would push for the results of a European report on the oversupply, or ‘dumping’ of low-cost steel in Europe and its effects on steel markets, something called for by Tata and union bosses alike earlier this week.
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