LIBERTY Steel has announced that 440 jobs across its UK plants will be at risk under restructuring plans to mothball at least two factories and reduce production at a third.
The steelmaker said its plant in Newport, Wales will be idled and transformed into a sales and distribution hub for LIBERTY products. Meanwhile, its West Bromwich facility will close and primary production at LIBERTY’s Rotherham plant will be reduced.
LIBERTY, part of Sanjeev Gupta’s GFG Alliance, said “high energy costs” and “imports from countries without the same environmental standards” have made the production of some commodity grade products “unviable”, despite £200m worth of shareholder capital being injected over the last two years.
Under the plans, LIBERTY says 1,900 permanent jobs will be safeguarded and it will look to offer redundancy alternatives – through its unique Workforce Solutions programme – to the c. 440 roles impacted.
LIBERTY Steel companies have been struggling financially since the collapse of Greensill Capital in 2021, which was the main financier of Gupta’s GFG Alliance. The new restructuring plan is the latest in a series of changes designed to revive the steelmaker’s fortunes.
LIBERTY has said it will consult with employee representatives, Trade Unions and UK Government throughout the process.
A worker in front of LIBERTY’s Electric Arc Furnace in its Rotherham plant. Image courtesy of Liberty House.
Jeffrey Kabel, Chief Transformation Officer for LIBERTY Steel Group, said: “Refocusing our operations will set the right platform for LIBERTY Steel UK’s high-quality manufacturing businesses to adapt quickly to challenging market realities. The support of our marquee customers will enable us to produce high value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy. We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a 2 million tonne green steel hub.
“While our action is expected to regrettably impact the roles of some of our workforce we will provide a level of guaranteed salary and out placement opportunities through our unique Workforce Solutions programme as an alternative to redundancy. LIBERTY’s shareholder Sanjeev Gupta has supported the business through a very difficult period and remains committed to the workforce here in the UK and ensuring our lower carbon operations help deliver a sustainable, decarbonised UK steel industry.”
Commenting on restructuring plans at Liberty Steel UK, Director General of UK Steel, Gareth Stace, said:“Today’s restructuring announcement from Liberty Steel highlights the significant challenges UK steel companies face navigating the current harsh market conditions. There will naturally be concern regarding the 440 jobs potentially impacted, but this is unfortunately an ongoing risk that accompanies a persistently uncompetitive business environment here in the UK, further exacerbated by global supply chain difficulties.
“High energy prices have played an important role in the decisions announced today, with long-standing uncompetitive electricity prices having constrained UK investment and steel production for some time. This highlights again the need for government to fully address the UK’s structurally high industrial energy prices, looking beyond the important announcements made regarding the Energy Bills Discount Scheme earlier this week. It is crucial we also now see the development of a long-term decarbonisation plan for the sector, ultimately ensuring that the UK can be seen as an attractive place to invest in steel production.”