South West Wales

£185m Corus investment at Port Talbot blast furnace

A £185m investment at Corus' giant steelworks in Port Talbot has been announced.

It involves rebuilding an old blast furnace at the plant, which employs about 5,000 workers.

The company called it a "major step" towards positioning the plant as a producer of high-quality strip products "on a global scale".

The rebuild will start in July 2012 and aims to safeguard the furnace for another 20 years.

The project is the biggest investment the steelworks site has seen for many years.

The investment in Port Talbot No 4 will improve safety and environmental performance.

David Ferris, chair of the multi unions at Port Talbot, said: "This is a massive boost for the area. Following our recent announcement that we are taking on some 150 young people, this news promises them a strong future - and a sustainable future for the whole community."

The rebuild will boost the capacity of the two blast furnaces by up to 400,000 tonnes per year.

Corus, which was bought by India's Tata Steel for $12bn (£6bn) in 2007, is Europe's second largest steel producer.

The plant supplies steel for construction, car manufacture, packaging and mechanical engineering across the globe.

Corus managing director and CEO of Tata Steel Europe, Kirby Adams said the investment was partly due to the commitment shown by workers across its sites in south Wales during the economic downturn.

He said: "This investment is a major step in achieving Tata Steel's ambition to position Port Talbot as a producer of high-quality strip products on a global scale and an internationally competitive cost base.

"Our capital expenditure decisions aim to invest in those who invest in themselves.

"The commitment and capability shown by our south Wales employees, to meet the challenges posed by the downturn, together with constant support we have received from the Welsh Assembly Government and the local community and unions, are important factors that have led to this decision."

'World class'

He said the project would enable the plant and its supply chain to continue improving the quality of its services and products.

The integrated steelworks business, known as Corus Strip Products UK, also has a base at the Llanwern steelworks in Newport.

Between the two sites the business has the annual capacity to produce some 5m tonnes of steel.

Corus chief operating officer Karl-Ulrich Köhler said: "This is a major investment designed to provide Port Talbot No 4 with a long new campaign life of 20 years.

"The furnace's energy efficiency and productivity will also be improved."

Along with the rebuilt No 5, the two blast furnaces employ 200 workers, around the clock.

The investment was welcomed by the Welsh Assembly Government.

First Minister Carwyn Jones said: "I am delighted to hear that Corus are making this major investment in Port Talbot, which has a long, proud history of steel making and is a vote of confidence in the productivity of both the management and the workforce."

He said it showed Wales could compete with the rest of the world in manufacturing.

Welsh Secretary Cheryl Gillan said: "Today's announcement will safeguard the furnace for decades, providing the workforce with a stable and secure future, and this can only be good news for them and the economy."

CBI Wales director David Rosser said the investment would provide stability for the region for many years and "safeguard thousands of jobs".

"It should be remembered that Tata is a global company, there would have been many contenders for such a sizable investment," he said.

Neath Port Talbot council leader Ali Thomas said the authority enjoyed a "unique working partnership" with the company's management.

"I can't stress strongly enough our gratitude to the part the unions, along with the workforce, have played in achieving this position," he said.

Community, the majority union at Corus, said the project demonstrated Corus' faith in the British steel industry.

But general secretary Michael Leahy said: "While Port Talbot's future as a centre of steelmaking excellence appears secure, the delay in concluding a deal that would see the resumption of steelmaking on Teesside continues to undermine the foundations of the industry.

"Community Union again calls for Corus to progress a deal with Thai steelmaker SSI."

In December 2009, Corus announced it was curtailing production at its Teesside Cast Products factory, putting 1,700 people out of work.

The decision was blamed on the collapse of a 10-year deal signed by an international consortium and led by Italian steel specialists Marcegaglia.

On 13 August 2010, Corus announced plans to build a £31.5m manufacturing plant on the same site at Redcar, creating up to 220 jobs.

The new facility will produce monopiles, the massive steel structures which are used to secure offshore wind turbines to the seabed.

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