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Released May 25, 2020 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Troubled U.K.-based steel manufacturers British Steel and Tata Steel are seeking increased government funding to help offset lower demand due to the COVID-19 pandemic.
China's Jingye, which completed its £1.2 billion ($1.5 billion) rescue buyout of British Steel in March, is reported to be seeking a loan request to the government for £100 million ($121 million). Wales-based Tata Steel reportedly needs roughly £500 million ($606.5 million) in government support to weather the coronavirus pandemic, according to the Minister of Parliament for Aberavon, Stephen Kinnock. The government has set an upper limit of £50 million ($60.5 million) for its Coronavirus Large Business Interruption Loan Scheme (CLBILS). Tata Steel and British Steel are the country's largest and second-largest steel makers, respectively.
Speaking in Parliament recently, Kinnock said: "The £50 million cap on loans that are now available under the government support scheme is only about 10% of what Tata Steel actually needs. Tata Steel estimates that it will take around six months to get back to business as usual, or as close as possible to it and the challenge they have is cashflow over that six-month period. And the estimation is in the region of £500 million."
The U.K.'s First Secretary of State Dominic Raab responded: "I know that the Chancellor is looking carefully at the steel sector in the honourable gentleman's constituency, and at all those who are not directly benefitting from this particular scheme to ensure that in the round we are providing the measures that we need in a targeted way to support all the different crucial elements of the economy."
Tata employs almost 8,400 people in the U.K. of which almost 7,000 are based in Wales. British Steel employs around 3,200 people at its Teesside and Scunthorpe sites. British Steel went into liquidation last May. Jingye employs 23,500 people, and alongside its core steel and iron making businesses, it also has interests in tourism, hotels and real estate. Industrial Info reported on the rescue deal in March. For additional information, see March 16, 2020, article - Jingye Completes Buyout of British Steel.
Last month, Sanjeev Gupta, chairman of Europe's fourth-largest steel producer Liberty Steel warned that time is running out to save Britain's steel industry.
"With travel locked down and disruption continuing to industrial supply chains, the pandemic necessitates a focus on proximity for the automotive, aerospace and construction materials sectors," Gupta wrote. "Steel is a foundation industry at the heart of these supply chains -- but its future in Britain is imperilled. Neglect over decades has eroded the foundations of a once proud U.K. success story. Well-meaning, but ill-conceived policies have diminished domestic output, leading to a glut of imports. In the '70s, there were more than 300,000 steel workers in Britain. Now there are barely 30,000. If we are not careful, the COVID-19 pandemic could be the final nail in the domestic industry's coffin as cash flow dwindles and safety-critical employees are forced to self-isolate."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
China's Jingye, which completed its £1.2 billion ($1.5 billion) rescue buyout of British Steel in March, is reported to be seeking a loan request to the government for £100 million ($121 million). Wales-based Tata Steel reportedly needs roughly £500 million ($606.5 million) in government support to weather the coronavirus pandemic, according to the Minister of Parliament for Aberavon, Stephen Kinnock. The government has set an upper limit of £50 million ($60.5 million) for its Coronavirus Large Business Interruption Loan Scheme (CLBILS). Tata Steel and British Steel are the country's largest and second-largest steel makers, respectively.
Speaking in Parliament recently, Kinnock said: "The £50 million cap on loans that are now available under the government support scheme is only about 10% of what Tata Steel actually needs. Tata Steel estimates that it will take around six months to get back to business as usual, or as close as possible to it and the challenge they have is cashflow over that six-month period. And the estimation is in the region of £500 million."
The U.K.'s First Secretary of State Dominic Raab responded: "I know that the Chancellor is looking carefully at the steel sector in the honourable gentleman's constituency, and at all those who are not directly benefitting from this particular scheme to ensure that in the round we are providing the measures that we need in a targeted way to support all the different crucial elements of the economy."
Tata employs almost 8,400 people in the U.K. of which almost 7,000 are based in Wales. British Steel employs around 3,200 people at its Teesside and Scunthorpe sites. British Steel went into liquidation last May. Jingye employs 23,500 people, and alongside its core steel and iron making businesses, it also has interests in tourism, hotels and real estate. Industrial Info reported on the rescue deal in March. For additional information, see March 16, 2020, article - Jingye Completes Buyout of British Steel.
Last month, Sanjeev Gupta, chairman of Europe's fourth-largest steel producer Liberty Steel warned that time is running out to save Britain's steel industry.
"With travel locked down and disruption continuing to industrial supply chains, the pandemic necessitates a focus on proximity for the automotive, aerospace and construction materials sectors," Gupta wrote. "Steel is a foundation industry at the heart of these supply chains -- but its future in Britain is imperilled. Neglect over decades has eroded the foundations of a once proud U.K. success story. Well-meaning, but ill-conceived policies have diminished domestic output, leading to a glut of imports. In the '70s, there were more than 300,000 steel workers in Britain. Now there are barely 30,000. If we are not careful, the COVID-19 pandemic could be the final nail in the domestic industry's coffin as cash flow dwindles and safety-critical employees are forced to self-isolate."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
