Jingye has pledged to invest £1.2 billion to place the business on a more competitive and sustainable footing. Jingye plans to return the company to industry comparable margins within five years.
Initiatives include:
- The development of an Electric Arc Furnace in Teesside
- The construction of a new 250MW power plant to serve the Scunthorpe site. The new plant is expected to be around a third more efficient than that it replaces
- Investment in the rolling mills to produce high-quality steel products to optimize the product portfolio
- Build a new rebar line
- Enhance the current rail mill
The completion secures the future of approximately 3,200 jobs and follows the agreement of new terms with customers and suppliers.
Jingye Group CEO, Li Huiming, said: “It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world. Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking.”
British Steel CEO, Ron Deelen, said: “This is a momentous day for our business, and I’d like to thank everyone for their dedication during a challenging year. I’m confident we’ll seize the incredible opportunity Jingye have given us to build on 150 years of heritage, and further cement British Steel’s reputation as a manufacturer of world class steel.”
Business Secretary, Alok Sharma, said: “The sale of British Steel represents an important vote of confidence in the UK’s steel industry. It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production.
“I would like to pay tribute to everyone who has been involved in getting this deal over the line, in particular to British Steel’s workforce for whom I recognise the uncertainty will have been challenging.
“I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on the ground support and advice to those affected.”
Further industry comment:
Gareth Stace, UK Steel director general: “The completion of the sales process for British Steel is fantastic news for British Steel and its workforce. British Steel is a major strategic asset, representing over a third of Britain’s steel production, so this news will be also warmly welcomed by their many customers in numerous manufacturing and infrastructure supply chains who rely upon on a strong domestic steel industry.
“After almost a year of huge uncertainty, punctuated by numerous setbacks, to have completed the sale of British Steel to a long term investor with a positive and ambitious plan for the future, is a hugely significant accomplishment and one the Government must be congratulated on. Three successive Business Secretaries have been unwavering in their support for the company, and this must be welcomed and recognised.
“As we turn the page on this particular chapter in the steel industry, I implore the Government to learn the lessons from this narrowly averted crisis and not return to business as usual. It is important we move on from the current reactive approach, to one in which a shared, long-term strategic vision sits front and centre; a New Deal for all UK steel producers. Our thoughts were echoed by the Teesside Mayor, Ben Houchen, last week when he spoke of the uselessness of “sticking plasters”.
“There is no time like the present, and the Chancellor has an opportunity to deliver meaningful action in Wednesday’s Budget, the first major fiscal event since the General Election. Action for steel producers on sky high electricity prices, business rates reform, and much needed innovation funds, can all help start that process of revitalisation and renewal, placing the sector on a clear trajectory towards a low carbon future.
“The Government has its first opportunity this week to truly deliver on its pledge to level up the UK. The steel industry employs tens of thousands of people outside the South East in high skilled, well paid jobs, in exactly the communities that the Government seeks to transform. In a further signal of intent and support, the Government must sign up to the UK Steel Charter ensuring that British steel producers and workers from Scunthorpe, South Yorkshire and South Wales, all benefit from the billions of pounds worth of Government infrastructure investments, including the £100 billion estimated spend on HS2.
“The steel industry is ready to invest in its future in the UK, all it requires is a partnership with Government to help deliver a level playing field that can unlock its potential.”
Charlotte Childs, GMB chief organiser: “On the one hand this deal must be celebrated; it keeps the steel industry alive in the UK, it safeguards more than 3000 jobs and offers a bright future - providing Jingye stick to their plan. On the other it is heartbreaking that long-serving members of high-skilled staff, many of whom have given their entire career to British steel, are seen as surplus to requirements.
“This deal is worth pursuing to safeguard UK steel for future generations. But, for the UK’s steel industry to have a long term future, we still need more Government assistance on energy costs to compete with European competitors, as well as domestic procurement orders.”
