The steelmaker, formed from the merger of British Steel and the Dutch company Hoogovens in 1999, is said to be closing one of its three main plants at Redcar on Teesside, Scunthorpe or Port Talbot in Wales.
A statement from the steel company said: “It is clear that Corus's UK losses have got to be reversed and, given the economic outlook, this will inevitably lead to significant further capacity reductions and concentration of operations onto fewer sites. A review by the Board is currently in progress and an announcement will be made on its findings as soon as possible.”
On Friday, Corus is to announce its preliminary financial results for the 12 months ending December 28 2002. In line with market expectations, the results will show an operating loss of about 393 million – up from the 377 million loss incurred in 2001 – from its UK carbon steel unit.
The group currently employs 26,000 people in the UK, but job cuts in the order of 3,000 are now thought to be on the horizon. In 2001, Corus cut over 6,000 jobs and closed more than 3 million tonnes of its iron and steelmaking capacity in the UK (see letsrecycle.com story).
Aluminium
The company had hoped to offset some of these losses – and restructure some of its reported 1 billion debts – by selling off the aluminium side of its business to the French company Pechiney for about 518m. However, after an emergency meeting last night, the supervisory board of Corus Nederland BV, the group's Dutch arm, rejected the sale.
Corus Nederland is a wholly-owned subsidiary of the Corus group, and is required by the Dutch statutory mitigated structure regime to have a supervisory board in place to advise the main group management board. Appointed for a minimum of four years, this supervisory board has significant powers over the management board in some areas, enabling the veto on the sale of the group's aluminium interests.
The main Corus board criticised its Dutch partners for acting “irresponsibly and unreasonably” by rejecting the sale. It said it would appeal the decision, and if the sale failed to go through the group would dispose of “non-core” assets.
The group's statement said: “It is intended that the proceeds of the sale will provide the capacity to finance the measures needed in the UK. Should the sale not proceed, the Group will need to look afresh for finance from equity and debt providers and may include proceeds from disposals of non-core assets.”
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