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First profit is only weeks away, say North-East steel chiefs
TWO years ago a North-East industrial icon was brought back to life when the blast furnace was re-lit at the former British Steel works in Redcar. Business Editor, Andy Richardson speaks to some of the people keeping alive Teesside steel making.
IF all goes to plan the SSI UK iron and steel plant will make its first profit this summer, bosses have told The Northern Echo.
That landmark cannot come too soon for SSI's Thai owners who have invested more than $1bn dollars in an operation which has been beset by delays, setbacks and cashflow problems.
Today marks the second anniversary of the re-lighting of the blast furnace at the Redcar plant which recently shipped the five millionth tonne of steel slab made since the restart ended a production hiatus of almost two years.
"We are still building the foundations of the business, but we are heading in the right direction," said Paul Warren, multi union chairman at the works, who praised the company owners, led by Win Viriyaprapaikit, SSI group chief executive and president, for keeping faith with the loss making plant and its 1,800 workers.
"Despite the financial challenges they faced there was never a time when they approached us about reducing staff numbers, or cutting hours, so they deserve a great deal of praise for that," added Mr Warren.
Cornelius Louwrens, SSI UK chief operating officer admitted the business suffered "a very tough" return to operation, as falling steel prices and the huge costs of bringing the plant back to life were among a succession of factors that kept the business firmly in the red.
"We are now on target to break even in this quarter and to show a profit before the end of the year," he said.
"We have to do that.
"Any business that doesn't make money inevitably dies. That is a fact of life. Our aim is to turn this around as quickly as possible. We cannot continue to rely on the support of our owners, we must stand on our own two feet."
South Africa-born Mr Louwrens, who joined the company six months before it returned to operation, recalled the moment in April 2012 when
blast furnace general manager Dave Johnson and 11 year old Wills Waterfield, whose late father Geoff had led the Save Our Steel campaign, performed the ceremonial relighting.
"There was a collective sigh of relief, but it was also the moment when the stress started.
"There were so many unknowns. It had been out of action for two years so we were asking - can this thing operate successfully? How big a risk is it to employ half of the workforce who have never made steel before?
"Yet here we are two years down the line having produced five million tonnes of steel slab.
"I am incredibly proud of what the team has achieved.
"Some things just didn't work out, most of which were factors outside of our control. No one would deny there havent been incredibly challenging times, but the dedication of our people, and the support of our suppliers means we are finally getting there," he said.
By 2016, Mr Louwrens wants the plant to be capable of making at least four million tonnes of steel a year.
Investment in a third caster is under consideration which would ease a bottleneck between the huge amounts of iron made by the blast furnace, Europe's second largest, and the steel-making lines.
"In the meantime, we are engaged in a process of continuous improvement. There is a big focus and a clear strategic plan to sweat the assets. We have to deliver," he added.
Martin Liddle, works manager, joined the plant in 1998 as a graduate trainee. He was a plant engineer at the South Bank coke works when the steel works was mothballed in 2010 by former owners Corus.
"That was a dark time and people feared the worst," he said.
"After SSI came on board I was part of the management team involved in the restart, so I had nice things to do like recruiting the new workforce.
"The return to production was the culmination of lots of hard work by lots of people. The feeling then was: 'Phew, we are back in business, now let's get stuck into the next challenge.'
"We have learned a lot. There is an excellent team here, and with our first profit just around the corner we can see light at the end of the tunnel," said Mr Liddle.