It has been eerily quiet at Redcar's steel plant over the recent months, and the mighty blast furnace of Teesside Cast Products' (TCP), once at the heart of North East steel production, has stood idle...
But, there is now hope that all that will change.
Mr Kirby Adams, MD and CEO of Corus, is optimistic that a deal on the table between Corus and Thailand's SSI will soon have the proud and skilled plant thriving again.
Last week, he sat down with SSI president Mr Win Viriyaprapaikit to sign a Memorandum of Understanding for the takeover of TCP and, if successfully concluded, the deal is expected to rekindle Teesside steel making, create a significant number of new jobs and provide a long term future for the operation.
While it may take several months to finalise the small print, Mr Adams said that the marriage on the table between Corus and SSI offers the opportunity of a sustainable future for TCP. He added that...
But, there is now hope that all that will change.
Mr Kirby Adams, MD and CEO of Corus, is optimistic that a deal on the table between Corus and Thailand's SSI will soon have the proud and skilled plant thriving again.
Last week, he sat down with SSI president Mr Win Viriyaprapaikit to sign a Memorandum of Understanding for the takeover of TCP and, if successfully concluded, the deal is expected to rekindle Teesside steel making, create a significant number of new jobs and provide a long term future for the operation.
While it may take several months to finalise the small print, Mr Adams said that the marriage on the table between Corus and SSI offers the opportunity of a sustainable future for TCP. He added that...
"I have a very positive feeling about SSI. I've known the company for 10 years, they became a customer of TCP last year, which enabled us to run the plant until December (2009). They believed in the plant and quality of the product which increased their interest in having a long term relationship with the company."
TCP’s world fell apart in May 2009 when it emerged that a consortium of international buyers had walked away from a 10 year deal to buy around three quarters of output from the site. The deal, which came into effect on January 2nd 2005, had originally been unanimously welcomed for giving the site a decade of security.
Mr Adams said that news of the consortium’s decision to turn its back on TCP came as a complete shock. The bombshell dropped, on what was just his second day in the top job, with a fax delivering the news that developed into the Corus crisis.
He added that "What they did was wrong, illegal and hugely damaging to people. A 10 year commitment was terminated with no justification. It created a crisis for the company and the community. But we had to put it behind us and look to find a long term solution for Teesside."
Corus and Mr Adams have faced criticism over the last year and a half for their handling of the situation at TCP. MPs and unions are among those who had hit out at the steel boss, having accused him of doing too little and being uncommunicative.
Mr Adams was also criticized for not attending the inquiry into the Corus crisis, headed up by former Stockton MP Mr Dari Taylor. But in April 2010, TATA’s Indian steel bosses rapped former Redcar MP Ms Vera Baird for her unwarranted criticism of Mr Adams.
He said that "If you are a chief executive you have to have thick skin. A leadership role means you have to be prepared to take the blame and give the praise. When the off-takers pulled out we had to find a solution. We worked night and day to get to a point where we had a long term strategic solution. That’s what we’ve done despite the criticism and innuendo that we were doing nothing."
He added that "Some buyers thought they could get a bargain or were interested in the land rather than running the site. But people wanted to talk to us confidentially about the site. We were working behind the scenes the entire time. To get to this point it has taken longer than many people would have envisaged."
Of the Government inquiry into the Corus crisis, Mr Adams said that he was improperly criticized. He explained that "I was not formerly invited. When I was invited it was a date when I was in India. I was then asked to answer questions by letter, which I did. The criticism was unjustified and unfair."
The proposed deal with SSI will see the bulk of Corus’ Redcar and Lackenby operations in new hands, including Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar blast furnace and the Lackenby steel-making operation.
Along with the Redcar Beam Mill, Corus will still own land at the huge 3,000 acre site which Mr Adams says the company is looking to open up to new opportunities. The company has announced plans for a GBP 31.5 million monopile factory for wind turbines on Teesside.
While discussions over a takeover of TCP have taken place behind closed doors, Mr Adams said that a couple of handfuls of interested parties had come forward. But Corus is now talking exclusively with SSI. He added that "We've put everyone else on hold, our aim is to get this transaction done."
SSI has said it is now finalizing the details and arranging financing for the proposed acquisition, which Mr Adams says is one of the most complex he has been involved with. He says signing the MoU with SSI is an amazing outcome for TCP against the turbulent economic backdrop seen in the last 18 months.
He added that "In the last year, TCP is the only steel making facility to be sold and we have faced a difficult world economy. The market for slab steel is still very difficult in the global market and it would be difficult for TCP if it were running the plant as a merchant. That's why it’s so crucial for Teesside to be tied up with a company that needs slab - a built in owner and customer."
SSI currently buys about four million tonnes of steel per year. It plans to produce 3.5 million tonnes of slab steel on Teesside, its full capacity, and export it all to Thailand.
Since taking up the top post at Corus, Mr Adams has cut USD 1 billion of costs out of the European operation and from a point where the company was making what he describes as unsustainable losses to the tune of GBP 100 million a month, it is now in profit. He will soon be packing up his UK home and heading to the other side of the globe for a new future in Australia and says career wise he has nothing lined up at the moment.
He said that "I'm very proud that we’re back in profit and I’m leaving the company in a better state then when I took it on. I came to the role at Corus at the height of the financial crisis but I came into it with my eyes wide open. Very strong leadership and tough decisions were needed."
He added that "A deal with SSI will deliver something better for Teesside than the off take agreement. It will create a better future for the facility. The sale of TCP will create sustainability."
In the last 18 months Mr Adams has come under fire from a number of quarters, including local MPs. In May 2010, he hit back at union criticism of his management style saying "I am a straight shooter, I don’t sugarcoat and I might irritate some people."
TCP’s world fell apart in May 2009 when it emerged that a consortium of international buyers had walked away from a 10 year deal to buy around three quarters of output from the site. The deal, which came into effect on January 2nd 2005, had originally been unanimously welcomed for giving the site a decade of security.
Mr Adams said that news of the consortium’s decision to turn its back on TCP came as a complete shock. The bombshell dropped, on what was just his second day in the top job, with a fax delivering the news that developed into the Corus crisis.
He added that "What they did was wrong, illegal and hugely damaging to people. A 10 year commitment was terminated with no justification. It created a crisis for the company and the community. But we had to put it behind us and look to find a long term solution for Teesside."
Corus and Mr Adams have faced criticism over the last year and a half for their handling of the situation at TCP. MPs and unions are among those who had hit out at the steel boss, having accused him of doing too little and being uncommunicative.
Mr Adams was also criticized for not attending the inquiry into the Corus crisis, headed up by former Stockton MP Mr Dari Taylor. But in April 2010, TATA’s Indian steel bosses rapped former Redcar MP Ms Vera Baird for her unwarranted criticism of Mr Adams.
He said that "If you are a chief executive you have to have thick skin. A leadership role means you have to be prepared to take the blame and give the praise. When the off-takers pulled out we had to find a solution. We worked night and day to get to a point where we had a long term strategic solution. That’s what we’ve done despite the criticism and innuendo that we were doing nothing."
He added that "Some buyers thought they could get a bargain or were interested in the land rather than running the site. But people wanted to talk to us confidentially about the site. We were working behind the scenes the entire time. To get to this point it has taken longer than many people would have envisaged."
Of the Government inquiry into the Corus crisis, Mr Adams said that he was improperly criticized. He explained that "I was not formerly invited. When I was invited it was a date when I was in India. I was then asked to answer questions by letter, which I did. The criticism was unjustified and unfair."
The proposed deal with SSI will see the bulk of Corus’ Redcar and Lackenby operations in new hands, including Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar blast furnace and the Lackenby steel-making operation.
Along with the Redcar Beam Mill, Corus will still own land at the huge 3,000 acre site which Mr Adams says the company is looking to open up to new opportunities. The company has announced plans for a GBP 31.5 million monopile factory for wind turbines on Teesside.
While discussions over a takeover of TCP have taken place behind closed doors, Mr Adams said that a couple of handfuls of interested parties had come forward. But Corus is now talking exclusively with SSI. He added that "We've put everyone else on hold, our aim is to get this transaction done."
SSI has said it is now finalizing the details and arranging financing for the proposed acquisition, which Mr Adams says is one of the most complex he has been involved with. He says signing the MoU with SSI is an amazing outcome for TCP against the turbulent economic backdrop seen in the last 18 months.
He added that "In the last year, TCP is the only steel making facility to be sold and we have faced a difficult world economy. The market for slab steel is still very difficult in the global market and it would be difficult for TCP if it were running the plant as a merchant. That's why it’s so crucial for Teesside to be tied up with a company that needs slab - a built in owner and customer."
SSI currently buys about four million tonnes of steel per year. It plans to produce 3.5 million tonnes of slab steel on Teesside, its full capacity, and export it all to Thailand.
Since taking up the top post at Corus, Mr Adams has cut USD 1 billion of costs out of the European operation and from a point where the company was making what he describes as unsustainable losses to the tune of GBP 100 million a month, it is now in profit. He will soon be packing up his UK home and heading to the other side of the globe for a new future in Australia and says career wise he has nothing lined up at the moment.
He said that "I'm very proud that we’re back in profit and I’m leaving the company in a better state then when I took it on. I came to the role at Corus at the height of the financial crisis but I came into it with my eyes wide open. Very strong leadership and tough decisions were needed."
He added that "A deal with SSI will deliver something better for Teesside than the off take agreement. It will create a better future for the facility. The sale of TCP will create sustainability."
In the last 18 months Mr Adams has come under fire from a number of quarters, including local MPs. In May 2010, he hit back at union criticism of his management style saying "I am a straight shooter, I don’t sugarcoat and I might irritate some people."
Source: Steelguru.com, Gazettel
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