ONE of Britain’s oldest steelmakers, Sheffield Forgemasters, may be rescued by an arm of the Chinese state, it was claimed on Sunday.
It was reported that an unnamed Chinese state-backed steel firm is believed to be among the bidders for Forgemasters, which employs 760 staff and has faced challenging market conditions.
Yesterday Graham Honeyman, the £80m turnover company’s chief executive, confirmed that Forgemasters has been in talks about the possibility of external investment, but the details remained confidential. Updates will be given “if and when” they become conclusive, he said.
Mr Honeyman said: “Sheffield Forgemasters International supplies high-technology engineered products and services to customers around the world and, despite challenging trading conditions which have affected the industry worldwide, the company remains financially stable and continues to win notable orders in defence, power generation, manufacturing and offshore sectors.
“We can confirm that we have been in discussions with a view to developing and securing new and material business and potential external investment in the company, as part of a long-term business development strategy.”
Unnamed sources also told The Sunday Times that Rolls-Royce and BAE Systems may have been supporting Forgemasters with advance payments. Accountancy firm KPMG is understood to be working with Forgemasters, according to the paper.
A BAE Systems spokesman said “Sheffield Forgemasters International is a supplier to our submarines business. The terms of our contractual relationships with our suppliers are confidential.”
Spokesmen for Rolls-Royce and KPMG declined to comment on the report.
A Ministry of Defence spokesman confirmed that Sheffield Forgemasters is a subcontractor in the submarine enterprise.
The spokesman added: “It is the responsibility of the prime contractor to manage its supply chain, and we are pleased that they are doing so in this case.”
A Department for Business, Innovation and Skills spokesman said British companies in the steel sector were facing commercial challenges.
“We are in regular contact with companies across the sector, including Sheffield Forgemasters, as they seek to overcome these challenges,” he added.
Tony Pedder, chairman of Sheffield Forgemasters, is among a group of industrialists who are calling for the creation of an independent body to develop a manufacturing strategy as fears grow that the decline of Britain’s steel industry could cause long-term damage to the country’s economy.
The sector has suffered a series of hammer blows this year, including the announcement last month that around 900 steel jobs are being lost at Tata in Scunthorpe and 1,700 at the SSI plant at Redcar.