MEP calls on Brussels to support North-East steel industry

6:30pm Friday 9th November 2012

By Andy Richardson

A STEEL firm which employs about 1,500 North-East workers has vowed to step up a cost-cutting drive after reporting a shock loss.
The announcement by Tata Steel, which operates across sites in Hartlepool, Redcar, Darlington, Middlesbrough and Skinningrove, east Cleveland, came as North East  MEP Fiona Hall called for intervention from Brussels to support the beleaguered North-East steel industry.
Ms Hall secured an urgent question to the EU Commission that has triggered a Parliamentary debate on the issue in a fortnight. It asks the Commission to come up with policies aimed at maintaining a strong steel industry in areas such as Teesside where it supports about 4,000 direct jobs.
Ms Hall, who is the leader of the Liberal Democrat MEPs in the European Parliament, said: "Forecasts show tough times ahead for the European steel market.
"With so much work having gone in to re-opening the (SSI) steelworks in Redcar, it's vital for local jobs that we ensure sufficient support for the industry is provided.
"Teesside's recovery is going to depend on the steel, chemical and manufacturing industries thriving.
"The UK government is doing its bit to help with Regional Growth Funding for SSI. Now I'm pressing for more to be done at a European level."
Ahead of the mothballed Redcar blast furnace returning to production in April the Treasury pledged £1.4m to help fund SSI's staff training programme. In recent months the Thai-owned company has stepped up efforts to secure a more significant cash injection from private investors. It hopes to complete a funding deal with Swiss steel trading company Vanomet in the coming days to help stabilise its finances.
SSI's cash woes, which have stretched the patience of some creditors, are symptomatic of the crisis that has beset even the largest steel producers who have struggled to combat rising raw material prices and sluggish demand.  
Tata Steel yesterday posted an after-tax second quarterly loss of £43m, compared with profits of £25m in the same period last year. Europe’s second-largest and India’s largest private sector steelmaker by output said the eurozone’s return to recession had hit it harder than expected, while lower steel prices cast doubts over future profitability.
Dr Karl-Ulrich Köhler, Tata Steel's European chief, said: "European steel demand and prices have weakened since the spring and this took its toll on our financial performance. Our response has been to accelerate our efforts to reduce those costs that we can influence. We are also bringing forward our new product development schedule and other elements of our market differentiation strategy. We expect the benefits of these actions, aimed at meeting our long-term goal of becoming
an all-weather business, to be reflected in future performance."
The company has revealed no plans to scale back operations in the North-East. In September it opened a new £2m facility in Hartlepool in a bid to secure orders from the offshore wind energy industry. The move is part of wider plans to offset dips in demand by broadening its product offering into high value sectors.
 

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