Tata Steel’s mothballed Tesside Cast Products (TCP) plant has been bought by Thai steel producers Sahaviriya Steel Industries UK (SSI) in a deal worth £291m ($469m).
It is a welcome conclusion to a 22 month search to find a buyer for the plant, which was mothballed in 2009, following the illegal withdrawal of a consortium of buyers from a ten year supply agreement.
SSI now owns the Redcar Blast Furnace, the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plan and the Lackenby steelmaking and casting facilities. In addition, Tata Steel and SSI have entered into a joint venture to operate the Redcar Wharf, TCP’s bulk terminal. This will also Tata Steel to use Teesside to serve its other steelmaking operations, while meeting SSI’s requirements.
It will ensure the 700 jobs at the plant are now secure and should create more in future. Around 1,700 people were made redundant when the plant was mothballed in 2009.
SSI president Win Viriyaprapaikit 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 TCP 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 added: “This deal is very good news for workers at the Teesside plant and the region. I welcome the return of steelmaking to this historic steel site later this year. Coming just over a year after the plant was mothballed, it is a tribute to both companies involved – Tata Steel and SSI.”
SSI signed a Memorandum of Understanding, setting out the scope of the transaction in August last year.
Tata Steel’s other UK operations are not affected.