Tata Steel UK has sold certain assets of Teesside Cast Products to Sahaviriya Steel Industries UK, a subsidiary of Thailand’s largest steel producer.
The value of the agreement was £291m. Teesside Cast Products (TCP) is owned by Corus UK Ltd, part of the Tata Steel group.
The agreement is the most significant achievement in the 22 months since Tata Steel began searching for an alternative future for TCP, after the illegal withdrawal by a consortium of offtakers from a 10-year supply agreement. The completion of the transaction will take place by the end of March.
Karl-Ulrich Köhler, managing director and CEO of Tata Steel in Europe, said: “I am very encouraged that after all our efforts we have been able to reach this agreement, which is good news for the highly skilled and dedicated Teesside workforce.”
The assets covered by the sale include the Redcar Blast Furnace, the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, and the Lackenby steelmaking and casting facilities.
The deal will also result in Tata Steel and SSI entering into a joint venture to operate Redcar Wharf (TCP’s bulk terminal), giving Tata Steel the flexibility to use Teesside to serve its other steelmaking operations, while also meeting SSI’s requirements on Teesside.
Tata Steel will continue to operate two large-diameter tube mills in Hartlepool, the Skinningrove special sections mill, Teesside Beam Mill and Teesside Technology Centre.
Mr Win Viriyaprapaikit, president of SSI, said: “This is a historic moment for both Teesside and SSI, one that would not have been possible without the local community’s passion for steel-making and the help of the UK Government. We look forward to resuming production of the top quality slab for which the plant is renowned as soon as possible.
“Owning Teesside Cast Products will enable us to achieve our long-standing ambition of becoming a fully integrated steel producer. This transaction will give us a strong platform for future growth, increase our resilience to industry cycles and give us opportunities to diversify into new markets and products.”
Business Secretary Vince Cable said: “Both parties have worked hard since August to reach a successful outcome on what has been a complex negotiation. This is a significant inward investment by SSI which will help to sustain the 700 jobs at the plant and create new ones at the site and the wider local economy.”