Uncertainty over deal for Tata Steel's Scots plants

23 December 2015

A possible buyer has emerged for two under-threat steel plants in Lanarkshire but it is unclear if any deal would be enough to save them.

Tata Steel is in exclusive talks to sell its Long Products business to venture capital firm, Greybull Capital.
The business includes the Dalzell plant in Motherwell and Clydebridge plant in Cambuslang which are to be mothballed with the loss of 270 jobs.

Unions have said Greybull's business plan does not include the Scots plants.

Steve McCool, national officer at steelworkers' union Community, told BBC Scotland that the prospect of a deal with Greybull would not necessarily guarantee the future of the Lanarkshire plants.

'Devil in detail'

He said the venture capital firm had a business plan which did not include work carried out at the Scottish plants.

Mr McCool said that a Scottish-only business model had been put forward to the Scottish Steel Task Force by the unions that showed both Lanarkshire plants were viable.

He said they could be sold independently, regardless of any prospective deal with Greybull, and he remained hopeful a buyer could be found.

The union's general secretary, Roy Rickhuss, welcomed the interest from Greybull but said "the devil will be in the detail of the deal".

He said: "It is also clear from today's announcement that any future for the Dalzell and Clydebridge mills in Scotland will be with a different investor.

"Again, this should bring renewed focus to the work of the Scottish government's task force in ensuring that the skills and assets are preserved and a buyer is found."

Scotland's Business Minister Fergus Ewing said: "While the development is potentially welcome, the agreement between Tata Steel and Greybull Capital is still at a very early stage and there can be no guarantees it will proceed - or that it will lead to a secure future for jobs at the plants involved.

"I am in close contact with Tata Steel and Greybull and I am seeking an early meeting to determine the precise implications for production and jobs at the Dalzell and Clydebridge plants."

Mr Ewing added: ?"The work of the Scottish Steel Task Force will continue to secure a sustainable future for the plants and support the transition to any new commercial operator."

Scottish Labour's James Kelly said clarity was needed over what any potential deal means for the Dalzell and Clydebridge plants.
"Steel is written into the DNA of communities in Lanarkshire and these skills should not go to waste," he said.

"The SNP government should clarify as soon as possible the long-term future of the plants and raise the issue with the proposed buyer as a matter of urgency."

In October, Tata said both Scottish plants would be mothballed, with 225 jobs going at Dalzell and 45 posts at the Clydebridge plant.

The firm blamed the cuts on a flood of cheap imports from China, a strong pound and high electricity costs.

The decision to close the two Tata plants in Scotland effectively ends production at the country's last two major steelworks.

The Dalzell Steel and Iron Works opened in 1872, and Clydebridge in 1887.