British Steel’s chief executive has broken his silence about the need for government support, following speculation over potential mass redundancies and a blast furnace closure.
Xifeng Han underlined the £330 million investment made by Jingye Group in the business since it bought it out of liquidation almost three years ago, and has urged Westminster to help with both the long-term Net Zero transition and the short term economic impacts. High energy and carbon prices are combining with a recessionary slowdown for the business, headquartered in Scunthorpe.
While there is no mention of workforce or capacity downsizing, Mr Han said the investment strategy is aligned to the decarbonisation plans, which will see the business embrace new technology and ways of working to drive down emissions and support clean growth. Speculation over sustainability has raged all winter since the Ukraine invasion sent energy prices soaring. It intensified over the festive period and comes on the day when Liberty Steel UK announces plans to shed more than 400 jobs in a major restructure that will see its Newport plant 'idled'.
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"Steel is vital to modern economies and with demand expected to grow over the coming decades, British Steel has a vital role to play in ensuring the UK has its own supply of high-quality steel,” he said. “To make sure we can deliver the steel Britain requires, we’re undergoing the biggest transformation in our 130-year history.
"To support the journey to Net Zero, our owner, Jingye, has invested £330 million in capital projects during the first three years of ownership and they continue to invest unprecedented sums of money in British Steel.”
The statement was released as the largest single investment by the business closes in on commissioning this spring. A new billet caster is a £54 million addition, and is used for manufacturing lengths of semi-finished steel. It will make the company more competitive while expanding the range offered.
"Jingye is committed to our long-term future but we also require the UK Government to provide the necessary support, policies and frameworks to back our drive to become a clean, green and sustainable company,” Mr Han said. "We’re continuing formal talks with the government about decarbonisation, along with the global challenges we currently face. The government understands the significant impact of the economic slowdown, rising inflation and exceptionally high energy and carbon prices are having on businesses like ours, particularly during such a key period in our transformation.
"British Steel can play a significant role in the UK’s economic recovery and we look forward to working with the government and to making the home-made steel Britain needs for generations to come."
Decarbonisation plans were first laid out by British Steel in October 2021. Described as the biggest challenge in 130 years of steelmaking, the major emitter at the heart of the most carbon intensive industrial cluster in the UK, has pledged to invest in a range of technologies to deliver net-zero steel by 2050, and significantly reduce its CO2 intensity by 2030 and 2035.
Spending now, alongside the billet caster, includes a new £26 million Special Profiles Mast Service Centre at Skinningrove, due to open later this year. It will allow British Steel to make and process an extended range of value-added profiles for the forklift industry. There is also a £27 million investment in three new cranes at Immingham Bulk Terminal, the Humber port facility that serves Scunthorpe.
A further £14.6 million is being invested to enhance energy operations, including projects to improve the way gases produced from works onsite are recycled to generate electricity. A multi-million pound IT system is also scheduled to go live in March.
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