Corus aiming for new deal
Apr 11 2008 by Paul Gannon, Evening Gazette
THE longer-term future of steel making on Teesside could be secured later this year, a Corus boss said today.
Jon Bolton, managing director of Teesside Cast Products, said discussions would be getting under way “soon” on extending the 10-year agreement to supply a consortium of overseas companies, which breathed new life into the plant in 2004.
The consortium - which is made up of Corus’ processing divisions, Duferco, Marcegaglia, Dongkuk and Imsa - buys the bulk of steel produced on Teesside.
With 75% of output now going abroad, the agreement helped push Teesside Cast Products to world number one in the export rankings for slab in 2007.
“We are hoping progress will be made this year to renegotiate the consortium deal,” said Mr Bolton. “It is going well and I don’t see any reason why it wouldn’t be extended. The market is also currently very strong.”
So far, the deal has leveraged £40m of investment from consortium members to create a dedicated rail link to Teesport. But an £80m upgrade to the blast furnace due in 2014 has triggered another round of talks, which will effectively commit the consortium to working with Corus well beyond the current agreement.
“The investment would also give the blast furnace a further lifespan of 10-15 years. The consortium brings with it investment,” said Mr Bolton. “We are getting to the point where we need to make some decisions.”
The news is just latest instalment in a remarkable turnaround for the company.
Mr Bolton said the long term strategy was to exploit the market for high-grade steel before emerging economies caught up. “Since the supply agreement, we have introduced 300 new grades and 60 new products. If you can find a route to market for specialist slab, then Teesside has a future,” he said.
