June 7, 2021
The UK steel sector has long faced difficulties around issues such as global overcapacity, Chinese dumping, sunken prices and high energy bills, which have all contributed to plant closures and significant job losses in recent years, such as those at former Redcar operator SSI UK. And, with last year’s rescue of British Steel’s Teesside mills by China’s Jingye Group now followed by financial worries at Hartlepool’s Liberty Steel, the industry continues to be hit by challenges. What action do you think needs to be taken to ensure the sector’s long-term survival?
The issues associated with British Steel, SSI and Liberty highlight a key risk associated with the steel industry.
Large manufacturing businesses need high levels of working capital to maintain and renew assets.
Any disruption to working capital, such as a financial crisis in 2008 and 2015, or a problem with the manufacturing process, can result in significant cash outflow, which requires owners to have access to funds.
Tata Steel and other global steel concerns, such as Thyssenkrupp and Arcelor Mittal, have access to funds due predominantly to their size, market diversity and global presence. Smaller companies are more sensitive to external pressures and must enter the commodity sector with a clear plan to attain scale and market presence or implement game changing product or process development.
To ensure these businesses are as resilient as possible there needs to be a competitive and supportive national strategy.
Steel is a key element of a country’s economic wellbeing and governments must make sure these critical industries can compete fairly. This means competitive energy costs, access to public- funded infrastructure projects, support for capital investments and a commitment to the retention and development of skills.
You have seen first-hand how the industry has changed over previous decades, having held senior roles with British Steel, Corus, Tata Steel, Liberty Steel, UK Steel and the UK Metals Council. How will you harness that experience to benefit the work of the Materials Processing Institute?
I have had a long association with the Materials Processing Institute, and I am fortunate to be joining a talented team who are passionate about their work and the impact it can have.
I can help ensure research and development can positively contribute to the foundation industries.
Significant productivity and cost benefits can be realised in process digitisation, waste processing and material efficiency. These are areas in which the institute has considerable capability and has been successful in winning government grants.
I will re-enforce that capability with government and industry.
Drawing on my experience, I will also support the development of a strategy to grow and enhance the institute.
The Materials Processing Institute has worked with industry for decades to support the development of new materials, processes and technologies. How will it support the shift to a low carbon economy, capitalising on this opportunity for Teesside and the UK as a whole?
Perhaps the biggest challenge and opportunity facing businesses in the foundation sector is the necessity to reduce the generation of CO2.
In the case of steel, the Materials Processing Institute is extremely well placed to help address those challenges and realise the benefits.
There needs to be a transition to electric arc steelmaking, where arc furnaces work alongside blast furnaces. Electric arc furnaces (EAFs) generate more than 70 per cent less CO2 than blast furnaces. The institute has the capability to have a global impact on the reduction of CO2 in steelmaking.
Teesside has made great strides in positioning itself as a leader in the development of a low carbon economy with the Net Zero Teesside initiative.
The recent announcement by GE that it is to create a new offshore wind blade manufacturing plant on the Teesworks site is extremely encouraging. The institute can and will support the region’s ambition and can indeed enhance its credentials as a leading proponent of net zero.