One of the largest steel plants in the UK may go into administration after it was revealed the company has suffered ongoing ‘significant and substantial’ losses over several years. Due to tough economic conditions, high energy costs and a fall in demand, the company is running out of options and could potentially appoint administrators if they fail to find a buyer.
Owned by Thailand-cased SSI, the Redcar plant in Teesside employs 2,000 workers and 1,000 contractors, specialising in iron and steelmaking. According to the Telegraph, the price of its steel slab has dropped by 40% in just the last year as a result of cheap parts imported from China – making it very difficult for the firm to make any profit.
SSI took control of Redcar back in 2010, spending around £1 billion to turn the business around and keep steelmaking operations in the UK. Unfortunately with the difficult conditions and falling demand over the last few years, owners have admitted the business is no longer sustainable.
Unions in the steelwork industry are calling on the government for support.
Update: 21st September – according to reports, SSI filed a Notice of Intention to Appoint over the weekend, with PwC ready to be appointed if the business goes into administration. All operations have been suspended at the Redcar plant since Friday. The notice will protect the company a short while longer allowing them time to negotiate a restructuring deal with creditors.
Update: 28th September
Unfortunately, SSI has announced that the Redcar plant will be “mothballed” and there will be 1,700 job losses. The firm said that it would be consulting with the employees on the situation.
If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an insolvent business. There is a link at the end of the video to the Government website which expands further on what you need to know.