Jingye promises £1.2bn British Steel investment

Jingye Group CEO Li Huimin

China’s Jingye Group announced its has completed the acquisition of British Steel’s UK and Netherlands assets from the Official Receiver.

Jingye has pledged to invest £1.2 billion “to place the business on a more competitive and sustainable footing.”

Assets included in the transaction include British Steel’s steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, as well as subsidiary businesses FN Steel in the Netherlands and TSP Engineering.

Jingye said it “plans to return the company to industry comparable margins within five years.”

The Chinese firm said initiatives will include development of an Electric Arc Furnace in Teesside and the construction of a new 250MW power plant to serve the group’s Scunthorpe site.

“The completion secures the future of approximately 3,200 jobs and follows the agreement of new terms with customers and suppliers,” said Jingye.

Jingye Group CEO Li Huiming said: “It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world.

“Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking.”

British Steel CEO Ron Deelen said: “This is a momentous day for our business, and I’d like to thank everyone for their dedication during a challenging year.

“I’m confident we’ll seize the incredible opportunity Jingye have given us to build on 150 years of heritage, and further cement British Steel’s reputation as a manufacturer of world class steel.”

UK Business Secretary Alok Sharma said: “The sale of British Steel represents an important vote of confidence in the UK’s steel industry.

“It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production.

“I would like to pay tribute to everyone who has been involved in getting this deal over the line, in particular to British Steel’s workforce for whom I recognise the uncertainty will have been challenging.

“I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on the ground support and advice to those affected.”