British Steel is set to make a £50 million investment its wire rod business in Scunthorpe in what will be considered as the biggest investment the company in 10 years.
The said investment is part of a turnaround programme that started back in 2016 when Greybull Capital established the business out of the assets that it had acquired from Tata for £1.
The investment will be used for improving the quality and range of wire rod that are produced at the headquarters of British Steel that is located in Scunthorpe.
In the past three years, British Steel has made investments amounting to £120 million in capital projects as well as in the acquisition of FNsteel, a premium wire rod manufacturer that is based in the Netherlands.
Roland Junck, the executive chairman of British Steel, stated: “Our order book is strong and we’ve the capacity and capability to play a significant role in major infrastructure projects such as HS2 and the Heathrow expansion.”
However, he said that the increase in raw material costs and shifting steel prices were a challenge.
Junck also urged for action to prevent the dumping of cheap steel into Europe after steel tariffs were imposed by the United States.
While the deputy chief executive of British Steel, Paul Martin, stated: “This is a major investment in the future of our business, underpinning our commitment to providing customers with higher technical specifications of steel and a diverse, premium product range.”
He added: “Not only will this increase our ability to serve the domestic market, it will allow us to become a more competitive exporter and accelerate the growth of British Steel in line with our company strategy.”
This week, British Steel was able to secure £90 million in debt funding from White Oak Global Advisors, a US investor.
Last month, Tata, the former owner of British Steel, agreed to a joint venture deal with Thyssenkrupp to establish the second-largest steelmaker in Europe that is set to have a workforce of around 48,000 employees and a revenue of approximately €15 billion (£13.3 billion).