Liberty Steel has placed almost
450 jobs at risk in the UK under plans to idle industrial production at three
plants and restructure at others.
The company says it will restart production
at the idled plants only “when the market and operating conditions allow”. It
claims the UK’s high energy costs and stern competition from cheaper foreign
imports make its current operations “unviable”, i.e. not profitable enough.
Under its new plans, production and
processing facilities in South Wales will be idled, making 120 workers in
Newport and another 35 in Tredegar redundant.
The West Bromwich site in England’s Midlands
will also be made dormant, with 100 jobs to go. Liberty’s Performance Steel
plant at West Bromwich will be transformed into a sales and distribution hub,
with workers offered continued employment through a “retain, redeploy and
reskill” programme.
Production will be reduced at the
Rotherham, Scunthorpe and Dalzell plants.
This week the company confirmed that 185
jobs will be lost in Rotherham, South Yorkshire, by plans to cut the production
of primary steel and instead use imported metals to manufacture higher-priced
special alloy steels. They will be imposed following a 45-day “consultation”
period.
The company will also focus on the
production of higher-value alloy steel manufacturing at its other South
Yorkshire plants in Brinsworth and Stocksbridge, abandoning cheaper “commodity
grade” products for which there is tough global competition.
Liberty Steel has had cashflow issues since
the collapse of its main financier, Greensill Capital, in 2021. Greensill was a
financial backer of Gupta’s collection of companies known then as Gupta Family
Group. The steel and energy group controlled by Gupta has still not paid back a
£7 million publicly funded loan it received in 2016.
Gupta’s operations face multiple problems, ranging from the resignation of the auditor of several key companies in September last year, to an investigation by the UK’s Serious Fraud Office and French police into “suspected fraud, fraudulent trading and money laundering”.