Two of three BiFab yards bought out of administration

Published
image copyrightGetty Images
image captionThe former BiFab Methil yard in Fife

Two of the three BiFab fabrication yards have been bought out of administration.

BiFab, which had two steel fabrication yards in Fife and the Isle of Lewis, went under last year after failing to secure any new contracts.

London-based firm InfraStrata is taking on sites at Methil in Fife and Arnish on Lewis, but not Burntisland.

It is hoped the yards can win contracts for offshore wind projects and shipbuilding under new ownership.

InfraStrata already owns the Harland and Wolff shipyard in Belfast and the two Scottish sites will operate under the Harland and Wolff brand name as part of the £850,000 deal.

InfraStrata's ideas for the Arnish yard include ferry maintenance, with the possibility of installing a floating dock.

BiFab was put into administration, when it was part-owned by the Scottish government and a Canadian engineering firm, having failed to win contracts to build platforms for offshore wind turbines.

The Scottish government put £37m into BiFab in equity and loans, and had offered a further £15m loan facility.

'Welcome development'

John Wood, chief executive of Infrastrata, told BBC Radio Scotland's Lunchtime Live programme he would be expanding on the company's current portfolio of work in oil and gas, shipbuilding and repair and renewables.

He said: "When you look at the fabrication work coming up in the UK, there's huge potential and we don't believe there is enough fabrication capacity in the UK.

"Clearly the market in renewables has been challenging - BiFab first went into that market over 10 years ago.

"If you're relying on government to fix your problems in any business then your plan's flawed before you start. We're looking to create our own destiny. We think there is money to invest and we're happy to invest that money."

Mr Wood said Infrastrata had not taken over the BiFab Burntisland yard because it was felt to be too small.

With so little recouped by administrators from the new owners of BiFab, there's little prospect of the Scottish government seeing much return from the £52m it loaned the yards under the previous management.

But at least there's some hope that these two yards will come into play in securing fabrication jobs linked to the boom in offshore wind.

InfraStrata is headed by someone who knows Fife, and recalls the Methil yard in its heyday. But it is new to the engineering business. Until December 2019, it was focussed on storage of gas in County Antrim.

The opportunity to take on the Harland & Wolff yard in Belfast at a bargain basement price was seized only 14 months ago, and a strategy built around that. The Appledore yard in north Devon followed last year.

Two more yards in Scotland add scale to the ambition, and scale is needed if the company is to compete with Asian and Spanish yards for offshore wind orders. These companies also have advantages in efficiency, subsidy and a fast-growing track record.

InfraStrata's business plan is based on the UK government's aims of 'levelling up' the economy around the UK, pursuing green manufacturing jobs, and on a shift in Royal Navy shipbuilding strategy that will put contracts to firms around the UK for assembly, rather than the conventional orders going to BAE Systems at its Clyde yards.

It also needs UK and Scottish governments to help ensure 'local content' in contracts for offshore wind, meaning UK yards winning some of the orders.

So there is a lot of government policy that needs to be aligned and to work out. And InfraStrata needs to dig deep with investment if it is to bring these assets up to internationally competitive standards.

image copyrightPA
image captionBiFab was initially saved following Scottish government intervention but later went back into administration

The Unite and GMB trade unions issued a joint statement welcoming the news that two of the BiFab yards will be bought out of administration.

It added: "We have always believed that the BiFab yards, and indeed yards and ports all over Scotland, are uniquely placed to capture the benefits of the offshore wind sector.

"However, the story so far has been one of government failure - thousands of jobs and billions of pounds have been outsourced around the world when Scottish communities should have been benefitting from these contracts.

Economy Secretary Fiona Hyslop said the deal was a "welcome development".

She added: "This is also welcome news for the local communities in Fife and the Western Isles.

"The workforce has an important role to play in the future of manufacturing in Scotland and I look forward to working with the new owner as it forges a new future for the company."

More on this story