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North-East steelmaker records first profit
Updated 5:12pm Thursday 10th July 2014 in Business
NORTH-EAST steelmaker SSI UK has made its first profit since production was restarted more than two years ago.
The major milestone follows a very challenging time for the business which has remained firmly in the red since it revived iron and steelmaking on Teesside in April 2012.
A combination of depressed global steel prices, high raw materials costs and the hundreds of millions spent to bring the former Teesside Cast Products plant back into operation saw the firm struggle to balance the books.
Without the support of its Thailand-based owners, bosses at the 1,800-job Redcar plant told The Northern Echo last year that the long-term future of the iconic business, and 170 years of steelmaking on Teesside, was in doubt.
Since the turn of the year, rising demand for Redcar steel from around the world, as well as production improvements and cost efficiencies made at the plant, have helped the firm to report its debut quarterly profit.
Cornelius Louwrens, SSI UK's chief operating officer, said: "SSI UK has recorded a positive monthly operational result for the first time since the Teesside iron and steel making facility was restarted in April 2012.
“I am very pleased that we have managed to achieve a positive EBITDA (earnings before interest, taxes, depreciation, and amortization) result in June, and everyone associated with SSI UK deserves credit for us reaching this important milestone.
"Of course we realise that we still have a long way to go to achieving our goal of making this a sustainable business, but this is a major boost for us and one which I believe will be the start of an improving trend towards full profitability. We are extremely grateful for the continued support we receive from our parent company, suppliers and all of our stakeholders”
James Ramsbotham, North East Chamber of Commerce chief executive, said:
“SSI arrived in our region at an incredibly difficult time. The fight to keep Teesside Cast Products open had been long and incredibly painful for many who relied on the plant for their income. It is therefore fantastic to see SSI’s commitment to the North-East being rewarded.
“They deserve a huge amount of credit. SSI began from effectively a standing start with a huge investment in new equipment and some turnover in the workforce in the teeth of the worst recession we've had in years.
“In a little over two years, they're turning a profit. There's real optimism for the future.”
The main business unit of Thailand's SSI recorded a net profit of £3.8m last year, but the consolidated group posted a net loss, in large part to SSI UK's deficit of about £300m.