Due to uncompetitiveness, the company will stop several factories that produce unprofitable products
Liberty Steel UK (LSUK) has announced its intention to focus on the production of high-margin products and suspend the production of unprofitable, with partial release of idle personnel. This is stated in the company’s press release.
“Given the serious challenges to the competitiveness of the UK steel industry, LSUK needs to implement several stages of its restructuring program to ensure a sustainable future for its business and workforce. This will enable companies to better withstand challenging market conditions, serve strategic supply chains and create the foundation for the country’s decarbonized steel industry,” Liberty Steel notes.
The company plans to focus on the production of high-value alloy steel at the Specialty Steel UK (SSUK) plants in Rotherham, Stocksbridge and Brinsworth. The products will be supplied to the strategic aerospace, energy and engineering industries.
SSUK will increase production of high-value products in specialized factories during the year to break even by September 2023. At the same time, LSUK suspended the process of selling the plants in Stocksbridge and Brinsworth.
In connection with the liquidation of unprofitable enterprises, the Liberty Steel Newport plants and the Liberty Performance Steel West Bromwich processing plants, which will be turned into sales and distribution centers of the company’s products, are subject to shutdown. Production cuts at the Rotherham plant are also planned to mitigate the impact of uncompetitive power costs.
At the same time, the company undertakes to resume commercial production and stopped factories when market conditions allow. The long-term goal is to modernize the plant in Rotherham to produce 2 million tons of environmentally friendly steel per year.
“Despite the injection of £200m of shareholder capital over the last two years, the production of some commodity grade products at Rotherham and downstream mills has become unviable in the short term due to high energy costs and imports from countries without the same environmental standards,” the company said.
The suspension of Liberty Performance Steels in West Bromwich and the reconfiguration of Liberty Steel Newport into a storage center could cut up to 440 jobs. The company will offer an alternative to layoffs through its unique Workforce Solutions program, which aims to retain, redeploy and retrain affected workers.
“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,” comments Jeffrey Kabel, Chief Transformation Officer for LIBERTY Steel Group.
As GMK Center reported earlier, UK steelmakers, including employees of Tata Steel UK, British Steel, Liberty Steel, Celsa Steel and Outokumpu, in December 2022 called on the government to urgently support the industry. The steel sector was under threat due to energy prices and cheap imports.