“FOR those true believers in Teesside steelmaking, who never gave up, this is your moment,” said SSI president Win Viriyaprapaikit, as he hailed Redcar steel plant’s first positive set of results for years.
Union leaders and steel managers were keen to stress that the first operating profits reported this week were only the start of a long process toward safeguarding one of the region’s landmark industries.
But after more than two years of setbacks, delays, cash crises and missed deadlines, the positive EBITDA (earnings before interest, taxes, depreciation and amortisation) result for June, has helped to quell fears that the works was on the verge of closure.
The usually understated Mr Viriyaprapaikit, who rescued the plant from mothballing with a £291m buy-out deal, issued a passionate statement to staff and the wider region that an industry started on Teesside 162 years ago could survive past its 200th anniversary.
“How many times have you been told that steelmaking on Teesside is over and that producing solely for export is a ludicrous proposition?,” he asked.
“How many times have you heard that we couldn’t make a success of this business and that there would be job losses again?
“Well, I’m hoping that what we achieved in June will put an end to those sorts of questions. For the first time since restarting the plant, in fact I have been told it had been many years before the mothball, we have managed to show a positive EBITDA result, which is a very important milestone for us.
“I admit there have been some very dark moments. As our ship left the shore in April 2012, we encountered the perfect storm, caught fire and were sinking, causing some to panic or become weary and demoralised. Yet, even in the most challenging of times, many of us kept cool heads, worked diligently and showed a true fighting spirit. Even while we were sinking, we had new talented people joining us for this cause. I knew then we would make it.
“For those true believers in Teesside steelmaking, who never gave up, this is your moment and I am proud of you.”
Last week, the Redcar plant made its six millionth tonne of steel slab since production restarted. Shipments of the 250,000 tonnes made every month are sent to clients in the US, Mexico, Europe and to SSI’s parent business in Thailand.
Until last month, however, the plant had suffered heavy losses of about £300m a year. The company’s Thai owners and backers have propped up the UK arm of the SSI group in the hope that it could eventually show a profit. The latest positive results have changed the firm’s risk profile, explained Cornelius Louwrens, SSI UK business director and chief operating officer, who said an improving bottom line will help convince the owners to make the investments needed for the 40-year-old plant to compete in a fiercely competitive market.
He added: “This result is pleasing, but it is not good enough, there is still a lot to do. The staff have made a tremendous effort and that has to continue.
“We haven’t done this just to get a good result in June. It’s all about how we fix the business in the long run. This is not the end of the story.”
As part of that process the plant is implementing cost saving measures to improve efficiency and build towards sustained profitability, but there are no plans to reduce its 1,800-strong workforce. The plant has 16 apprentices and is recruiting five more in September
Paul Warren, community branch secretary and chairman of the SSI multi-union committee, said: “The last two years have been a worrying time, but the staff have been brilliant and bought in to what the management were trying to achieve.
“Win (Viriyaprapaikit), deserves all of the credit in the world. Considering the losses we were making he could have just picked up sticks and walked away. But he kept faith in us.
“Without the steelworks and the jobs it provides, Teesside would be a much poorer place. It is so important for this area that it survives.”