It’s estimated about 1,500 West Midlands jobs could be on the line with another steel giant on the brink of collapse.
Caparo Industries, which operates about 20 sites across the UK, this afternoon filed for administration in Birmingham.
Accountancy firm PwC has been appointed as the company’s administrator where it will try to find a suitable buyer for Caparo.
According to the latest reports, all staff are still employed and being paid.
According to reports by The Telegraph, the company fell victim to numerous factors currently taking a heavy toll on the steel industry, including cheap steel products from the Chinese market, rising energy costs and tighter taxes.
Matt Hammond, lead administrator and partner at PwC, said: “This is a significant business with a wide range of interests across steel, engineering, vehicles products and technologies. Its scale and reach into significant customers and its importance to suppliers cannot be understated. We will be rapidly assessing all options for the businesses through this week and beyond.
“The impact of steel prices and exchange rates has had an impact on some parts of the Caparo Industries group. However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support.
“Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business.”
Earlier today, UK Steel director, Gareth Stace released a statement putting pressure on the Government to raise the concerns of industry over the “dumping of under-priced steel” into the UK market.
“If the worst is confirmed with further job losses in the steel industry, I would hope the Prime Minister would use the opportunity of this week’s visit to raise the issue of Chinese dumping of steel,” Mr Stace said.
“As well as reinforcing the need for the EU to tackle unfair dumping of steel across Europe, Mr Cameron’s intervention would send a powerful signal to Beijing that he is prepared to stand up for British steelmakers.
“If the Prime Minister can make headway on this, and the Business Secretary can act quickly to tackle spiralling energy costs by compensating the industry for the various levies that penalise it, we may start to give the steel industry some confidence that the Government is supporting it before it’s too late.”
The companies named by PwC as part of the administration were:
(1) Caparo Industries Plc (2) Caparo Engineering Ltd (3) Caparo Steel Products Ltd (4) Caparo Vehicle Products Ltd (5) GW 957 Ltd (6) Bridge Aluminium Ltd (7) Material Measurements Ltd (8) Caparo Precision Tubes Ltd (9) Caparo Precision Strip Ltd (10) Caparo Vehicle Technologies Ltd (11) Caparo Tube Components Ltd (12) Caparo Modular Systems Ltd (13) Caparo Advanced Composites Ltd (14) Caparo Accles & Pollock Ltd (15) Caparo Tube Components 2 Ltd (16) Caparo Atlas Fastenings Ltd