Corus Back on a Roll As Steel Demands Grow Worldwide

Times are changing for Corus.

Last year, the company was taken over by Indian conglomerate Tata, which its managing director, Kees Stolwijk, says is opening up new opportunities for the group, including its South Yorkshire operations.

It was feared that the Indian group might sell off Corus Engineering Steels (CES) as it had no engineering steels operations of its own, but Mr Stolwijk believes that the growth of the Chinese and Indian economies, and Tata’s own automotive interests, mean that CES is an integral part of the business.

Last week, Tata added Jaguar and Land Rover, two of Corus’s clients, to its group.

Mr Stolwijk said: “When Tata executives have visited, they’ve been impressed by our products and are quite supportive of the business. The takeover should give us more opportunities, such as in the automotive industry where Tata is a growing force.

“We make sophisticated products for a number of growing industries such as power generation and aerospace. If we get it right and keep improving, we will fit nicely within Tata.”

Over the last few years, the company has switched its focus to the specialist section of the market because it cannot compete with the mass production of steel coming out of lower-cost countries, and rising commodity prices.

The firm supplies steel for the A380 Airbus – the world’s largest passenger aircraft – and Boeing 787 Dreamliner. It also produces steel for Formula One cars.

In recent times, it has supplied steel for NASA’s space shuttle and also recycled scrap metal from the old Wembley Stadium.

The decision to concentrate on the higher end of the market led to CES moving some production from its Stocksbridge plant, near Sheffield, to Rotherham, 18 months ago.

During the moving process, the company re-opened the billet mill, in Stocksbridge, and created 90 temporary jobs to take some of the pressure off the main Aldwarke mill, in Rotherham, while it adapted to the changes.

CES is now turning the temporary posts into permanent jobs after the increased demand for its products.

But although things are looking up, 2008 is shaping up to be a challenging year for CES.

Rising transport costs, fuel costs and the shortage of raw materials are all having an effect on the industry. The global credit crunch is also presenting its own problems.

Mr Kees said: “The dollar has weakened, which means it’s more difficult to export into the US.

“The pound has also weakened against the euro, which means we are in a better position to export into mainland Europe, although our competitiveness is still hampered by the fact our energy prices are much higher than our European competitors.”

But despite these challenges, it appears that Corus is going through a bit of a renaissance period. Turnover stands at Pounds 11bn and, according to Mr Stolwijk, its forecast profits, though not as high as its European competitors, remain achievable.

With 1,350 staff, CES remains the largest private employer in Rotherham. It also employs a total of 600 people at its Stocksbridge plant.

Corus also employs 4,000 people in Scunthorpe and a further 4,000 people in Teesside and the North-East.

For the first time in a decade, Corus Engineering Steels is taking on more people than it is shedding. It is also employing more apprentices and graduates, reinforcing its commitment to the future of the steel industry in South Yorkshire.

Mr Kees added: “Steel is still a very solid industry. Growth in absolute terms is still big.”

Corus was created in 1999 when British Steel merged with Holland’s Hoogovens. But plagued by cheap imports and the global economic slowdown after 9/11, by 2005 the company had lost more than Pounds 2bn and cut around 13,000 UK jobs.

A huge restructuring programme took place as the company invested millions of pounds in upgrading its equipment.

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