By Arlene Foster
British Steel is to speed up its job cutting programme as part of a renewed cost and efficiency drive.
The cuts, as yet unquantified, are being made in response to the strength of sterling which is adversely affecting the group’s sales and costs.
British Steel shed 500 jobs in the first half of last year, with a similar number estimated for the rest of 1996. European sales, which represent 38% of total turnover, are especially vulnerable to fluctuations in the German mark.
Over the past year sterling has risen by about 25% against the currency, weakening British Steel’s sales into Europe and opening the door for imports into the UK from Germany.
Analysts estimate that British Steel loses £100m of profit for each 10 pfennig rise in sterling.
Union sources said closure of the works at Shelton, Staffordshire, which British Steel had warned might close during its long battle with Irish Steel over state aid, is unlikely at present.
The rolling mill is benefiting from an upturn in construction markets and British Steel has put a £10 increase on structural steels. About 100 jobs have been cut at the plant since the fourth quarter last year, reducing employees to about 350. Losses were in administration and production.