British Steel in US deal

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The Independent Online
British Steel yesterday continued its strategy to invest outside Europe when it announced plans to put £48m into a joint venture to build a mill in the United States.

The news came as a committee of MPs called on the Government to stand firm in Europe and fight any new state aid for the steel industry.

BS's chief executive, Brian Moffat, welcomed the MPs' report, saying that while subsidies to the European steel companies continued it could find more attractive areas in.the world to invest in.

The Commons Trade and Industry Committee warned yesterday that if Britain's European partners continued to subsidise their steel industries and failed to cut capacity, Britain would have to review its stand on state aid.

It said Britain had to keep up its campaign for better European Union monitoring of the industry and for tougher powers against offenders. The committee said its report was prompted by concern over the European Commission's ability to control the steel industry.

Britain's unsubsidised industry exports £2.6bn worth of steel a year after cutting output by 14.5 per cent between 1988 and 1992 while boosting productivity.

A 1993 restructuring plan aimed at cutting European steel capacity by between 19 million and 26 million tonnes collapsed this year after EU ministers allowed state aid for six companies in Italy, Germany, Spain and Portugal.

BS said it was to build a mill producing sheet and strip products in the US, under a joint venture with LTV Corporation and Sumitomo Metal Industries. LTV will own 50 per cent of a new company, Trico Steel, with BS and Sumitomo holding 25 per cent each.