Resumed production heralds new era for Newport steel plant
Posted on Friday 16th October 2015
Production resumed today at the Liberty Steel Newport ("LSN") rolling mill on the banks of the river Usk in Newport, South Wales, signalling the start of a new era for the 40 year old plant.
In a move that bucks recent trends in the UK steel industry, the Welsh plant went back into action more than two and a half years after it was mothballed by its previous owners.
International steel and metals group, Liberty House ("Liberty"), which bought the facility in summer 2013, has retained the 150 staff over the intervening period in order to be ready to restart when market conditions allowed.
The creation of Liberty Steel Newport and the start of production at the Works marks a major new development in the 24 year history of Liberty, whose owners believe that there is still great potential for manufacturing in the UK.
Management has further stated that what makes Liberty different to previous operators is its strength as an international steel trader and its implementation of profoundly increased efficiency at the plant here in Newport which has not been at the cost of local jobs.
Initially the Newport Works will produce approximately 50,000 tonnes of hot rolled coil per month for the UK domestic market with potential to increase this to 100,000 tonnes per month, to serve export markets as well. Liberty Steel Newport will also look to reinstate the Bar and Rod mill that the previous owners sold.
Steel from the plant will be used in the making of a variety of products from fencing through to crash barriers, lorry chassis to office furniture, tooling through to general fabrication.
Representatives of the steel industry, community and public sector gathered at the 110 acre site today to celebrate the latest chapter in the story of Liberty and of the plant itself which was first set up as Alphasteel back in 1974.
Group Managing Director of Liberty, Sanjeev Gupta, who founded the enterprise as a metals trading company from his student flat at Cambridge University in 1992, hailed the resumption of production as, "the result of a lot of hard work and a strong belief in the potential of the plant here and the skills of the workforce
Adding, "Steel production is right at the heart of the manufacturing eco-system. By investing in making steel products we are helping to sustain a whole network of customers and suppliers across the South Wales and UK economy."
Liberty retained the 150-strong workforce following its acquisition of the plant, continuing to pay half their salaries during the mothballed period. According to Mr Gupta, "We recognised that the skills of the workforce has been built up over many years and we knew how difficult it would be to reassemble a new team with the same capabilities. We intend to buck the recent trend in the UK Steel Industry which have culminated in the tragic loss of jobs at both the TATA Llanwern site here in Newport and the closure of SSI Redcar. UK has the richest history in steel production in the world and production is viable here, what is needed is a lean productive operation which is also agile and flexible, and one that is able to adapt quickly to changes in the market."
In a market environment where melting steel is not viable in the UK due to the tax policy on the coal based power, Liberty Steel Newport will support green energy and will implement several renewable energy initiatives both at the plant and its neighbouring sister company SIMEC Uskmouth Power.
Speaking about future plans, Mr Gupta went on to explain, "Once energy prices for UK industry are brought in line with the rest of Europe, we will look to re-start the Melt Shop also to make liquid steel once again. It is inconceivable that the United Kingdom exports scrap that is melted in other countries who then supply steel made from this scrap back here. Until we can make liquid steel again we will import slabs from the most competitive sources available, produce HRC and service our UK customer base efficiently. Having our own port and our global network and experience as a steel trader and supplier to 32 countries give us a competitive edge which we intend to take complete advantage of."
Sister company SIMEC through its Utility subsidiary supplies both power and gas to Liberty Steel Newport bringing significant energy cost saving. This is an innovative first in the UK Steel Industry and is a move away from drawing power from the traditional large Utility providers in the UK where terms and charges have proved punitive for the manufacturing industry in the UK.
In summary, Mr Gupta spoke about his positive outlook ahead for employment in the region, "While we wait for UK energy policy to reform enabling viable power prices for liquid steel production we will also start our scrap operation in anticipation. We will modernise the Hot Strip Mill, and we will reinstate the Bar and Rod mill. We intend to continue creating jobs and investing in the skills of local people here in South Wales."