British Steel announce £50m investment

2 mins read

British Steel has announced the biggest investment in its manufacturing operations for a decade with a £50 million scheme to upgrade its wire rod business.

The investment will significantly improve the quality and range of wire rod produced at the company’s Scunthorpe headquarters, which will allow British Steel to enter new markets inside and outside the UK, as well as grow in current ones.

The new facility will allow for a wider range of sizes to be produced to tighter tolerances, as well as allowing for improvements in surface condition and microstructural properties.

British Steel has already committed £120m to capital projects during its first three years of business, and today’s announcement comes eight months after it bought FNsteel, a premium wire rod manufacturer based in The Netherlands.

“This is a major investment in the future of our business, underpinning our commitment to providing customers with higher technical specifications of steel and a diverse, premium product range, said Paul Martin, British Steel deputy CEO. “Not only will this increase our ability to serve the domestic market, it will allow us to become a more competitive exporter and accelerate the growth of British Steel in line with our company strategy.”

The investment will see a modern wire rod line installed in the plant this summer, with the line due to be commissioned in the autumn of 2019. The plant has already installed new laboratories to provide world-class testing facilities. The existing wire rod business, which employs 300 people, will operate as normal throughout.

“The mill upgrade will ensure the British Steel name remains synonymous with quality, innovation and product development,” continued Martin. “Our wire rod business has a growing order book and this investment will let us build on this by guaranteeing the tighter tolerances and improved surface qualities customers demand, particularly in the automotive sector.

“By continuing to make investments like this … we aim to become the steel supplier of choice for more businesses across the world.”

British Steels’ wire rods are used in a range of applications, including tyre cord, bed springs, oil rig moorings and bridge cables. It also goes into paper clips, nuts and bolts and muselets – the small wire cages around champagne corks.

“Our wire rod performs an essential role in letting people go about their everyday lives, from the car or bus they travel to work in to the bed they sleep in at night,” said Richard Sims, managing director of British Steel Wire Rod. “It’s one of the most diverse products available so this investment will not only deliver significant improvements to our customers but to hundreds of millions of end-users.

“Today is also hugely significant for our employees whose skill, and dedication to customer satisfaction, enable us to invest with such confidence. Together we look forward to opening the new line and growing into the new markets this investment allows.”

The news came as British Steel announced 'strong' first-quarter profits of £21 million. Welcoming the news, Tony Brady, national officer for steel at the Unite union, said: "The government must now step up and ensure that this brighter future is not short-lived. Ministers need to support the UK steel industry by ending the Brexit chaos that has engulfed the government and secure tariff free access and frictionless trade to the European Union in Brexit negotiations.

Ministers must also work with their European counterparts to find a resolution to Donald Trump’s steel tariffs and the global overcapacity of steel which threatens the future of the UK’s steel industry.

This positive news and investment is in no small part down to the British Steel workforce, whose tireless hard work has helped turn the company around. Their commitment and sacrifice has helped secure a brighter future for steelmaking in Scunthorpe, when only a few years ago it was hanging by a thread.