Changing markets, new opportunities and a touch of altruism have emerged as the main factors prompting Sheffield Forgemasters to abandon a multi-million pound bid for Government-backed Regional Growth Funding.
The Brightside Lane steel and engineering group had originally applied for funding for three projects.
It had planned to refurbish a small forging press, boost machining capabilities for oil industry components, and install a hi-tech refining furnace for steel used to make rolling mill rolls.
Prospects for winning the funding were good, with both Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable backing the application.
However, the firm says a slower than anticipated recovery, combined with rapid changes in the global markets targeted by the RFG investments, have persuaded it to rethink its strategy.
“We became unsure that these were the right projects to spend serious money on,” said Forgemasters director Peter Birtles.
“It got to the point where we had to decide whether to take the money and get on with it, or release it so it could be used by another company.
“It would have been awful to have the funds allocated to us and unused.”
Forgemasters has shifted the emphasis of its investment to the technology and research and development parts of its business and says it will use funds from other Government sources, such as the Technology Strategy Board and its own profits.
“Using those two sources us keeping us very busy on some very useful R&D projects,” says Mr Birtles.
Forgemasters says it hasn’t ruled out seeking funding from further RGF rounds for the three projects it has temporarily shelved, if market conditions stabilise and start to improve.
Noises from the Government suggest that any further application is likely to be sympathetically received.