Put gallows humour apart – the Jingye deal looks good news for the north-east.

There ought to be some gallows humour up at Scunny this morning. After all, the issues British Steel has had, have been largely down to the dumping of steel on the UK market by the people who are now picking up the marque and substantial production capacity for just £70m. the price-tag has a decency level on it, this is a give-away designed to protect 4,000 direct jobs and five times as many indirectly. The timing could not be better for those who are offering the prospect of a brave new post-Brexit world.

Much of the humour will be focussed on the cultural fit – or lack of it – as displayed in pictures of Jingye HQ and the Scunthorpe works

 

But these are serious businesses and this a serious bid

From what I know – which isn’t much – what goes on at British Steel is specialised stuff. Stefan Zaitschenko, a lifelong steel-man and organiser of pensions information when BSPS members had to choose, is a fan. So I’m pleased for him, for Scunthorpe and Teeside and I’m pleased that we have a good news story to talk about this week.

Most of all, I’m pleased for the 3,000 steelworkers at Scunthorpe and the 800 in Teeside, who’s jobs – and pensions – are tied up and secured if this deal goes ahead.

I can understand scepticism like Paul’s

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But I think and hope that here he is wrong.

Jingye are likely to have a strong interest in securing access to UK Government loans, particularly over meeting complex carbon bills due to the EU which are a legacy from the failed previous ownership under investment firm Greybull Capital.

Informed opinion seems to support the Chinese bid;

This site was the first in the world to develop and apply technology that allows production of more sophisticated, higher grade steel with higher reliability. It helped fend off the threat from cheap imports from China for several years. Although other steel mills have since begun to apply similar technology, this is the place with the most experience at it. It is the only steel mill still operating in Britain that makes high grade steel such as what is used in railroad track. Selling it to another country, particularly China, makes ever so much sense for a country that is on the verge of going it alone in the global market.  – Bonnie Tuval 

and again

Brilliant news on both the personal and professional front to hear British Steel have found a buyer overnight. I know the Turkish Pension fund was deep into the due diligence process, and admittedly the Chinese bid has blindsided them at the tail end of this, but both businesses seem intent on investment and utilising the high-quality steel that is made at Scunthorpe to complement their existing specialisations within the volume market. Let’s hope this is the start of a renaissance within the industry in the UK and the start of a recovery for Scunthorpe after a very difficult few years. – Richard Tuxford

With a pledge of long term investment and on the eve of a general election, there would be pressure on the Government to help ease through the deal with some taxpayer’s help rather than lose the opportunity and return to the search for a buyer.

Let’s put gallows humour apart – today’s a good day for the north east.

BSPS Missing

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to Put gallows humour apart – the Jingye deal looks good news for the north-east.

  1. julierichardswbacom says:

    I grew up in Teesside, saw the heights of British Steel’s power and the subsequent decline of it and so much else in what was an industry heartland. The sense of irony is doubly painful when you consider this was an area that voted strongly in favour of leaving the EU (with the sense of neglect by what is thought of as the Westminster elite being evident in other locations too). The fact that some will have greater security of jobs, and the peace of mind this creates is very good news for them but it is not enough to justify calling it a good day for the North East (Scunthorpe, NE?).

    • henry tapper says:

      Thanks for putting me right on the geography and I agree, 4000 jobs saved is not the same as regenerating a region. I get up to the North East for work and football. Outside of Newcastle, I find the neglect you talk of everywhere. It is shocking to a southern softie – thankfully I have a few friends – like Stefan – who keep me vaguely honest – I’ll add you to that list. Good luck with your latest corporate shenanigans BTW

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