A “TERRIBLE, dark time” for North-East steelmaking was apparently at an end last night as a Thai company confirmed it was about to buy Corus Teesside Cast Products (TCP).

Sahaviriya Steel Industries (SSI) and Corus have signed a memorandum of understanding paving the way for a £320m deal and steelmaking restarting at the plant, near Redcar, east Cleveland, by early next year.

The signing early yesterday morning signalled the end of a traumatic period for TCP workers, who saw the plant mothballed in February.

More than 1,000 employees have left the plant since then, but SSI president Win Viriyaprapaikit, who joined Corus chief executive Kirby Adams in signing the agreement, confirmed that the 700 steelworkers remaining at the facility would be kept on should a deal progress.

Although a final deal has to be signed, the fact that SSI has been locked in talks with Corus for a year, coupled with the fact it has already made plant visits as part of due dilligence, gives tremendous cause for confidence it will go ahead with the purchase.

Both companies said they hoped to conclude a sale “as soon as possible”.

Mr Viriyaprapaikit added: “Yes, the 700 existing employees will be offered jobs on the same terms and conditions as they are currently on, according to UK law.

“In terms of offering new jobs, I would have to say that it is too early at this stage to give a definite number, but we are hopeful that we will be drawing on the skilled workforce that exists on Teesside.”

There had been months of speculation that a deal was imminent, but workers were still shocked by the news yesterday morning.

Corus Long Products director Jon Bolton said: “Judging from the reactions when I spoke to them this morning, they were a little bit surprised.

They have had such a difficult 18 months and I hope they will take some time out to celebrate.

“I am obviously delighted with the announcement today. It is not a done deal, but obviously a significant step.”

SSI’s interest in TCP had been well documented, but Mr Bolton, who described the past 18 months as a rollercoaster, said that until the announcement was made official yesterday, he could never have been totally sure an agreement would happen.

He said: “I don’t think you can ever be 100 per cent confident, but I was confident in the product – we have the plant and equipment, the employees and skills. I felt the ingredients were there but it is always difficult.

“I do think they have got a good deal if you look at the advantages to buying a plant in good condition with the skills and track record in comparison to a brand new steel plant.

“SSI is a family company; the biggest steelmaker in Thailand and buys about four million tonnes of steel a year, so they are a very professional company with a good reputation.”

TCP multi-union chairman Geoff Waterfield said the area had been through a “terrible, dark time”. “I am partly still in shock and getting fleeting moments of absolute euphoria,”

he said. “We have been up and down so many times and it is starting to sink in.

“For me, personally, I have never stopped believing we would start making steel on Teesside again.

“We are all in a little bit of shock, for us it has been a long wait.

“We have known SSI for ten years, they have bought steel off us for many years and are a very forward-thinking company.”

Mr Waterfield travelled to Thailand in May after Mr Viriyaprapaikit agreed to meet a North-East delegation of union leaders and MPs in Bangkok.

He added: “I always hoped these were the people. The talks progressed very well, so it was a bit of confidence and hope mixed together – we have seen other deals fall through.”

In January last year, steel firms Marcegaglia and Dongkuk had signed a memorandum of understanding (MoU) to buy a majority stake in the TCP plant, but months later pulled out of that and a ten-year “offtake” agreement they had signed in 2004, alongside two other firms, to take nearly 78 per cent of the plant’s output.

But Mr Waterfield was confident that SSI would not leave the plant in the same predicament.

He said: “I don’t think a company like SSI would be doing what they are doing to walk away after two years.”

Describing it as fantastic news for the area, Redcar MP Ian Swales, who also travelled to Thailand, said: “From that visit onwards I have been not only hoping, I would say I have been quietly confident.

“The other thing we saw was the industrial logic behind this deal, their operational needs and the amount of steel that can be exported from here to their deep water port.”

Alan Clarke, One North East chief executive and chairman of the Corus Response Group, said: “This is wonderful news for the business, the local area and wider North-East economy.

“The primary aim of the response group was always to support Corus in the sale of the TCP business to see steelmaking return to Teesside and to support redundant workers.

“SSI is a globally renowned steel producer and the MoU is a highly significant step towards steelmaking beginning once again on Teesside, potentially by the middle of next year.”

Joanne Fryett, head of member relations at the North East Chamber of Commerce said: “Steelmaking is at the heart of our local economy and it was a bitter blow when the plant was mothballed.

The announcement is a new chapter for steelmaking on Teesside and gives hope to the highly-skilled workforce and the talented wider supply chain that this plant will once more be a major player in our economy.”

The assets covered by the MoU include the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar Blast Furnace and the Lackenby Steelmaking facilities.

A sale would also result in Corus and SSI operating Redcar Wharf as a joint venture.