Caparo saviour in fresh bid to prop up steel industry
THE group which helped to save Black Country-based steel group Caparo is reported to be behind a major new deal which could help save the British steel industry.
However, the deal being brokered by the Gupta family’s Liberty Group could be at risk because of high energy costs.
The Sunday Telegraph reported that the deal being prepared could create 1,000 jobs directly in the steel industry which could lead to an additional 3,000 in the supply chain.
The newspaper said Liberty has agreed to buy an arc furnace and rolling mill from a disused steel plant in Sheerness, Kent, for the purpose of dismantling the plant and equipment and moving it to the group’s facility in Newport, South Wales.
The equipment, which would have the capacity to produce 800,000 tons of steel annually, is being purchased from Peel Group at an undisclosed price – although reports claim if it were purchased new it would cost around £1bn.
However, the plan is thought to be at risk because of concerns about energy costs, with claims the company is urging the Government to support its aims for cheaper energy deals.
Should the Sheerness deal prove economically unviable for the group, then it has said it may have to look abroad to source supply, possibly the United States or India.
With the Government keen to secure the British steel industry as an engine for growth then it may be prepared to be flexible, especially with a Budget due next week.
Liberty purchased the bulk of the Caparo Group in a deal late last year after the company lapsed into administration due to cheap steel imports from China flooding the UK market, although falling demand and higher energy costs are also thought to have played a role in the group’s demise.