Orders confirmed at Corus' Teesside Cast Products plant

Oct 2 2009 Evening Gazette

CORUS' struggling Teesside Cast Products plant has confirmed orders until the end of the year.

The news was announced this morning to the steel plant’s 2,000 staff, who have been working under threat of redundancy since April.

MD Jon Bolton said the additional export orders - to be shipped through Teesport - were a “significant step forward and a timely boost” for TCP. But while it buys more time for the plant to find a long-term solution to its problems he stressed that the next six months were “critical”.

“We must, must, must perform. If we have a hiccup or delay or costs go up, it puts us in jeopardy,” said Mr Bolton.

Since a consortium of international buyers tore up a 10-year agreement to purchase nearly 80% of TCP’s output, the company has fought to bring its costs in line with the market average and find alternative outlets for its specialist product. Margins have benefited recently from a rally in the world steel price across all sectors. But that should not be confused with a return to business as normal, said Mr Bolton.

“The market is still difficult,” he said. “The prices are going up and down. it’s bouncing on the bottom at the moment. The next six months are critical for us.”

It is nevertheless a remarkable turnaround for the plant, which in May was working to a two-week order book while production had fallen to around 60% of capacity. The additional orders announced today restore it to levels not seen since October 2008, when the blast furnace was producing 8,500kt a day.

“We know that we need to perform not only to win orders in the short term, but also to position ourselves as a successful business for the future,” said Mr Bolton.

The plant’s hopes are pinned on finding a new buyer.

Chairman of the Teesside steelworks’ multi union committee, Geoff Waterfield, said: “This is excellent news for everyone on the site. People can now plan for Christmas, which is also good news for the local economy.”

Union bosses on Teesside took the Save Our Steel campaign to the Labour Party conference earlier this week. The fringe meeting was attended by Business Minister Pat McFadden, Business Minister, Minster for the North East Nick Brown and Redcar MP Vera Baird.

“We were very clear about the situation on Teesside and the implications of losing the steel industry,” said Mr Waterfield. “The mathematics are simple. Spend a bit of money now supporting the sector, or spend a lot of money over the next 10-20 years if we lose steel making and the community is decimated.”