Liberty Steel is set to buy the advanced engineering business of Caparo Industries from administration, saving more than 600 jobs.

The company last month snapped up Caparo’s tubes arm and reopened a hot rolling mill in Newport, south Wales, in October.

The Midlands-based advanced engineering arm makes components for the automotive and aerospace industries.

Caparo collapsed into administration in October, at the height of a global steel crisis that has rocked Britain’s industry. About 4,400 jobs have been cut in the UK steel sector since the summer, equivalent to 15% of the industry’s 30,000-strong workforce at the start of the year.

Liberty is run by Sanjeev Gupta, who founded the business as a metals trading operation from his student flat at Cambridge University in 1992.

Lord Paul’s Caparo Group fell victim to a toxic cocktail of high energy costs, onerous “green” taxes and cheap Chinese steel that has halved the price of metal on global markets.

The government has pledged to help alleviate some pressure on domestic steelmakers from high energy costs. Ministers also want to increase the number of contracts won by UK manufacturers in public procurement processes without violating EU competition rules.

Since Paul’s business fell into administration, putting 1,700 jobs at risk, PricewaterhouseCoopers has been seeking buyers for Caparo’s 16 different units.

Liberty snapped up Caparo’s tubes business last month, which preserved about 350 jobs at Oldbury in the West Midlands.

Britain’s steel sector has been battered by the falling steel price, leading to the closure of Thai group SSI’s plant in Redcar, with the loss of 2,000 jobs. Tata Steel, which owns the rump of the former British Steel, has also been forced to cut almost 1,000 jobs at its Scunthorpe plant.

Sources believe Tata will run down the Scunthorpe plant over the next few years unless it can find a buyer. The Lincolnshire mill produces steel for “long products” – used mainly in the construction and rail industries.

Liberty has bucked the trend by snapping up Caparo’s castoffs and breathing new life into the Newport mill, which it bought in 2013.

 

theguardian.com

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