British Steel collapse fears spark scrutiny of owners Greybull

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The reborn British Steel was supposed to herald a new era in an industry that has suffered from decades of closures and job cuts.

Instead, less than three years after it was founded, the company is becoming more like a reminder of some of the darkest days in the history of UK manufacturing.

The country’s second-largest steelmaker was plunged into turmoil last week after it emerged that it was seeking a £75m taxpayer bailout — just two weeks after ministers agreed to an emergency £120m loan to help it meet EU environmental payments.

With talks at an impasse and fears of collapse mounting, there were even whispers in Westminster of a possible nationalisation.

Then on Thursday British Steel appeared to have averted immediate crisis by securing new funding from its existing lenders, although it made clear this was only a stopgap.

Despite the reprieve, there are serious questions about what has gone so wrong at a company with 5,000 employees that returned to profit in its first 100 days of new-found independence — and whether it has a viable future.

At the same time, scrutiny is sharpening on the actions and motives of private equity group Greybull Capital, which bought the business it would rebrand as British Steel for £1 from India’s Tata Steel in 2016, saving thousands of jobs.

Negotiations with the government hit a wall because the investor was either unwilling or unable to put money on the table, a key condition for ministers, said people briefed on the situation. Greybull has said it “invested additional capital as recently as last month”.

Any wariness on the part of government might be down to the investment fund’s chequered record.

It was the owner of Monarch airlines that went bust in 2017, forcing the government to … Read More...

Cheap steel threatens to shut down Qualitec Industries

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Qualitec Industries, a major producer of roofing sheets, is on the verge of shut-down as smuggled cheap steel hurts the company.

BusinessDay visited the aluminium maker to ascertain the impact of poor import policy on it and it was gathered that it has already cut down the number of workers significantly in the last five years.

It was gathered that the number of workers at the expansive factory is fewer than 50 from almost 300 in 2014.

Steel makers complain that importing full or plain aluminium is cheaper than bringing in inputs.

“When you import plain aluminium, for example, you pay five percent duty. But when you wish to import your input like galvanised sheets, for instance, you pay 35 to 45 percent duty,” a key player in the steel sector told BusinessDay.

Qualitec’s caster and rolling mills are still on. But its power plants run almost 24 hours. Coating lines and other sections are still on, but lack of patronage is slowing down activities in the factory.

BusinessDay had visited the factory at Ota, Ogun State, in 2014.

Oluyinka Kufile, chairman and chief executive of the company, was then optimistic. He had told BusinessDay that he had invested   $100 million in new plants, machinery, captive power plants and resuscitation of existing plants. A second production line was being installed, he had said, while machines that would be required, alongside technicians that would operate them, were expected to arrive in Nigeria from Turkey.

“We have made these investments because we believe that what is worth doing at all is worth doing well, “said Kufile had said, during a tour.

“We are in the forefront of production of aluminium in Nigeria and we are very proud of this,” he said.

“It is a huge investment that … Read More...