The Spanish parent company of one of Britain’s leading producers of reinforced Steel has put the company up for sale.
Celsa Steel UK, a plant in Cardiff that supplies the Hinkley Point nuclear project in Somerset, is the biggest producer of reinforced steel in the British construction industry and also one of the nation’s top recyclers of metal scrap, which they use to feed their electric arc furnaces.
Switching to electric arc smelters to produce steel with lower emissions has become an important topic for British industry. This is especially true after Tata Steel announced last month that it would close its blast-furnaces at Port Talbot along the coast of south Wales in favor of electric arc smelters.
The “for-sale” sign that will be placed over the Cardiff Plant for an estimated €200,000,000 has much to do what is going on at Celsa. Celsa’s parent company, based in Catalonia, and one of Spain’s largest industrial firms, has become the global leader of recycled “green steel” production.
Celsa is in a financial crisis, since Covid-19 began, and fell into the hands its creditors led by Deutsche Bank in September. According to reports from Madrid, the company, advised by Citibank and Bain & Co consulting firm, has embarked on a disposition programme.
Expansion is a Spanish paper that reported that Celsa was planning to sell assets worth up to €1.3billion, including €800million from its steel mills located in Poland. Its plants in Britain and the Nordics were also expected to bring in €300millon and €200millon, respectively.
The decision casts doubt on the future of the 750 employees directly employed by Celsa Cardiff, as well as several hundred subcontractors throughout the region.
The news that the Spanish firm wants to leave Britain couldn’t have come at a worse time for the government. The government has pledged to spend £500 million in support of Tata Steel’s restructuring. This will result in the loss of 2800 jobs.
More people will ask for help from the industry. The Chinese-owned Jingye group is likely to close Port Talbot’s blast furnaces, as will Tata’s old Scunthorpe Works, now known as British Steel.
It will ask taxpayers to provide subsidies in order to stop thousands of jobs from being lost, particularly in one the “red wall” districts that are typical in election years. Scunthorpe switched from Labour to Conservatives in the general election of 2019. This was a 12.8% swing. In the 2015 elections, Ukip (the leave-EU party) polled the largest number of votes in the UK before Brexit.
Celsa’s Cardiff facility has the capacity to produce up to 1.2 millions tonnes of steel per year. However, most recent figures indicate that it produces less than one million tonnes. It would still be about a sixth the UK’s current output which is at its lowest level in nine decades due to depressed domestic demand, and the competition of foreign exporters.
Cardiff’s facility is a key player in the regeneration of South Wales, especially around the Celtic Freeport. It also produces steel for offshore floating wind farms.
Celsa purchased the plant from the receivers in 2002 after the collapse of Allied Steel and Wire.