British Steel accused of investment sloth

Consultant says Germans are winning in technology battle

By Arlene Foster

British Steel’s failure to invest in next generation technology in the UK will further erode its competitiveness in Europe by 2002 and could lead to more job cuts, a leading industry consultant claimed this week.

Thin slab casting and direct strip casting technology being introduced in Germany by Ruhrstahl, the combined Thyssen-Krupp steel group, will bring it substantial energy and other cost savings.

Steven Randall, principal consultant at Beddows, said that aside from capital savings, thin slab technology, which reduces the number of stands in a rolling mill, is £9-£12/tonne of steel cheaper than traditional slab casting. Direct casting, which eliminates the need for any hot rolling mill, could bring a further £6/tonne saving.

British Steel, which is looking to cut annual costs by an average of £10/tonne, has not developed these technologies in the UK.

`With the pound against it and the emergence of stronger EU players, British Steel does not look strategically strong for the next millennium,’ said Randall.

British Steel said it was monitoring the situation but added it had created efficient steelmaking operations using existing assets and technology. This includes the modification and installation of a traditional caster at Llanwern in 1995, using plant from its former Ravenscraig site. `This was the lowest cost route. We chose not to install thin slab casting for commercial reasons,’ said a spokesman.

It is gaining technological knowledge from its US sites, which include the Trico mini-mill joint venture in Alabama which uses thin slab technology.

Randall said British Steel needs to re-examine its strategy: `Without deeper structural changes and further joint ventures, it’s hard to see how British Steel will maintain competitiveness.’

Introduction of the new technologies in Germany will cut Ruhrstahl’s workforce from 23,600 to 17,000. After DM800m-DM1.3bn (£292m-£481m) in restructuring costs, it expects to recoup annual synergies of DM550m.