Thai steel company SSI has signed a memorandum of understanding to buy a mothballed Corus Steel factory for £320m and hopes to begin producing steel again in 2011.
The Teesside Cast Products plant in Redcar was mothballed by Corus owner Tata Steel earlier this year after a consortium of four international steel buyers pulled out of a ten year contract which provided 80 per cent of the workflow at the site just four years in.
Today, Tata announced a deal has been reached with Thailand’s largest steel producer, Sahaviriya Steel Industries, to buy the plant. SSI has said it plans to employ over and above the 700 workers there.
Corus MD and CEO Kirby Adams said: “We are very pleased to announce this significant progress in our long-held objective to sell the TCP assets to a strategic industry investor.” “This is the first of several steps required to reach a definitive sale agreement in the coming months which, with the anticipated co-operation of Government, employee representatives and the North East community, should result in the restart of steelmaking on Teesside in the first half of 2011. Having known SSI for the past ten years, I am confident that our collaborative efforts in the period ahead will provide a more sustainable business for the people of Teesside.”
Win Viriyaprapaikit, President of SSI added: “We have great respect for the tradition of steelmaking on Teesside and for the highly skilled Teesside workforce, having previously purchased slab from Teesside Cast Products.
For the past year we have held very constructive negotiations with Kirby Adams and the Tata Corus team and we look forward to engaging with all stakeholders in the same spirit of co-operation to secure a final agreement.
“This transaction will enable SSI to fulfil its long-standing objective of becoming a fully integrated steel producer with both primary steelmaking and rolling facilities.”
Earlier this month Corus announced it is to invest £185 million pounds to rebuild a blast furnace at Port Talbot steelworks south Wales. The work will begin in 2012 and will increase the facility’s output by up to 400,000 tonnes a year.