British Steel today outlined plans to improve its Special Profiles business. The plan will cover both the Skinningrove site on Teesside and the Darlington site in County Durham.
The plan sets out to strengthen the competitive position of the business through growing sales, further investment and reducing costs. This could lead to a reduction of up to 70 jobs over the next two years.
As previously announced the company will spend £1.8 million this summer on raising manufacturing capabilities at its Skinningrove plant which, along with Darlington, makes market-leading components for earth-moving equipment. Further investment is planned to modernise the plant by introducing automation to the production process.
Peter Gate, British Steel Managing Director Special Profiles, said: “We’re striving to become a global leader in special profiles but to do this – and deliver the high standards customers quite rightly expect – we need to be more flexible and more efficient.
“In recent years, prior to the launch of British Steel, the Special Profiles business hadn’t been profitable. It’s encouraging that we’re now making a profit but we must become even more competitive if we are to grow and win more orders.”
In addition to increasing sales and investing in the plant, the business must also reduce its costs. Peter said: “We will be working closely with our unions to determine how we reduce our overheads, including employment costs.
“The proposed plan seeks to reduce the number of positions in the Special Profiles business by up to 70 over the next two years and I understand this news will be upsetting for those people affected.
“We will give them all the support needed and will work with our other sites in the North East region to minimise the impact.
“We’ve already identified up to 20 opportunities at our Teesside Beam Mill plant in Lackenby and we hope some employees will consider transferring to those roles.”
Peter added: “We’ve explored a number of other options but this strategy is the one we feel best suits the future needs of our business and our customers. That is why we remain committed to spending nearly £2 million on state-of-the-art descaling technology to further improve the surface quality of our products.
“Our proposals will enable us to not only continue meeting the exacting demands of the market place, but exceed them by continually improving the quality of our products and customer service.”
British Steel was launched last year and has five business units – Primary Products (iron and steel-making), Construction, Rail, Wire Rod and Special Profiles.
The Special Profiles investment is part of a wider £39 million package of capital investment across the business during its first 12 months of ownership. In this time, more than 350 new people have joined the wider company.
The previous loss-making long products business has been transformed into one making consistent profit and British Steel Managing Director Paul Martin said: “While we have pledged nearly £40 million of capital investment and welcomed hundreds of new people to the business, there are still many challenges.
“We are continually looking at new ways to develop and grow our business. We’re not proposing job losses in any other areas of the business and we passionately believe we can build a sustainable future for British Steel.”
Products manufactured by employees at Skinningrove and Darlington include crane rail (developed for overhead gantry and floor-mounted cranes in ports, warehouses and shipyards), track shoes (for excavators and diggers) and wear-resistant steel for use in underground and surface mining operations.
The Special Profiles business employs 331 people, including 24 at Darlington.