Chris McDonald, the Chief Executive of the Materials Processing Institute, has hailed the government’s move to nationalise Sheffield Forgemasters as a major show of support for the UK’s steel and manufacturing sectors.
He also welcomed its pledge to invest £400m in the business over the next decade – which, he says, will also bolster the nation’s steelmaking sector.
The Sheffield-based steel company is to be bought by the Ministry of Defence in a £2.6m deal with £400m invested in “defence-critical plant, equipment and infrastructure”.
Due to be completed on 19 August, the acquisition is designed to secure domestic steel production and protect national security interests, particularly in the supply of parts for the Royal Navy’s ships and nuclear submarines.
The Teesside-based Institute has developed a close relationship with the defence manufacturer over many years, collaborating on a range of research and technology projects designed to support British steel jobs.
It serves as the UK’s national steel innovation centre and, in the March 2020 Budget, Chancellor Rishi Sunak announced £22 million for the Institute’s PRISM programme supporting research and innovation for the steel and metals sector.
Chris McDonald said: “This is one of Britain’s oldest companies which, like many others in the UK steel sector, has struggled financially in recent years in the face of cheap imports from China.
“The fact that the government has chosen to nationalise Sheffield Forgemasters as part of a long-term rescue package reveals just how important it is to this nation’s security.”
Rotherham-based Liberty Steel recently announced a major restructuring plan following the collapse in March of its main financial backer, Greensill Capital.
Chris added: “The capability of the UK steel industry in this area was looking rather uncertain and required decisive government intervention. Had the sector been weakened any further, it would have reached a level where it became unviable, and this nation would then be reliant on sourcing its steel from foreign powers.
“The nationalisation of Sheffield Forgemasters and the planned £400m investment will strengthen the whole sector. This is a vital industry which is needed to underpin UK manufacturing and to lead the way in this country’s transition to a net zero future.”