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Corus Teesside to be relocated to Sahaviriya, Thailand?
Aug 28, 2010
After months of negotiations, Corus has finally agreed to sell the mothballed steel unit at Teesside in the UK to Thailand’s Sahaviriya Steel Industries for about $500 million, bringing to an end year-long efforts by Tata Steel. The plant can produce 3.5m tonnes/year of slab.
Corus, the international subsidiary of Tata Steel, will sell its steelmaking assets and power generation facilities to revive the Teesside unit after a key client walked away from a contract in 2009 making operations at the unit unviable.
Tata Steel later said the loss from the reneged contracts amounted to about $233 million, about 80% of Teesside’s business.
The assets covered by the deal include the Redcar and South Bank coke ovens, sinter plant, the Redcar blast furnace and the Lackenby steelmaking facilities and slab caster.
“The deal is expected to create significant number of new jobs at the plant in addition to Teesside’s existing workforce of over 700 people,” Corus said in a statement.
The Thai company says the acquisition would further its "strategy of backward integration to upstream iron and steel production to support present production." It also says it will increase its flexibility in production and marketing scenarios, providing "geographic and product diversification benefits."
One of the stumbling blocks in the talks, Steel GRIPS understands, has been Corus' insistence on inserting non-competition clauses into any agreement, meaning it would be difficult for SSI to establish a finishing mill at the site.
Although three buyers had expressed interest in the Teesside unit in the past year, Tata Steel’s talks with Sahaviriya Steel Industries strengthened after the Thai steelmaker showed interest in the Corus technology for construction-grade steel. SSI doesn’t have the technology.
According to people familiar with the development, Sahaviriya Steel Industries is exploring options of relocating vital plant and machinery from Teesside to Thailand. The company would then be able to export to markets closer home and also cater to customers within Thailand, the people added.
The plan to ship the machinery is also in line with a recent proposal to develop an offshore wind farm business on the site at Teesside. Earlier, there were unconfirmed reports that Tata Motors, another group company, would set up a car making unit at the Teesside site.
In addition, make sure to read these articles:
Corus Teesside to be relocated to Sahaviriya, Thailand?
Corus mothballs Teesside, UK, steel plant
Karl-Ulrich Köhler to join Corus as new COO
Corus, NL, optimizes production in continuous casting
Kirby Adams new chief executive for Corus
New drive systems for hot strip mill at Corus IJmuiden
Corus to idle blast furnaces at Scunthorpe, IJmuiden and Port Talbot
Corus to invest EUR 80 million into energy management
Metallic coated steel product with outstanding corrosion properties
Corus Staal orders an X-Melt 330-t twin ladle furnace
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