UK steel industry faces threat from Russian investors in Corus

A major Russian shareholder in Corus yesterday called on the steel maker to consider abandoning the UK if it fails to turn around its losses.

The plea from the aluminium tycoon Oleg Deripaska came as a fellow Russian businessman, Alisher Usmanov - the metals entrepreneur who has built up a 13 per cent stake in Corus - put forward a candidate to sit on the board. He believes Corus's British arm is mismanaged and wants to see more Dutch influence on the way it is run.

Mr Usmanov, known as the "hard man of Russia", has proposed Aad Van der Velden, a former manager at Corus, as a non-executive director, to improve performance. Mr Deripaska, a business associate of Mr Usmanov, supports his appointment. It is understood that the backing of Brandes, a 15 per cent US shareholder in Corus, has also been sought.

"We are not very impressed with the performance of the UK business. I can't think of a better environment for the steel industry at the moment - it is the only steel company we have been able to find in the world that has generated such poor results," said David Geovanis, the managing director of Basic Element, which manages Mr Deripaska's assets. He said an exit or sale of all or part of Corus's business in the UK should be considered by the board if there was not a dramatic improvement in results. "If they can't figure out how to make money from it then maybe they shouldn't be doing it. It's not rocket science. It's steel production," Mr Geovanis said.

Five years after British Steel merged with the Dutch company Koninklijke Hoogovens to create Corus, the company is still unprofitable. The merger was supposed to create economies of scale, but since then losses of some £2bn have piled up and it is the company's UK arm that is seen to be dragging down the group while the Dutch division powers ahead. The group last month reported a £208m loss for 2003, despite huge demand for steel from China and India.

The two Russian shareholders, although not acting together, are preparing to grill the board over the performance of the UK business at its annual meeting next week. "Mr Usmanov is concerned that the British arm is not run as efficiently as it could be and value could be unlocked by introducing the Dutch management style," a spokesman for Mr Usmanov in Moscow said yesterday. "He thinks the big picture put forward by the management is blurred. He wants to know what the real financial situation of the business is.

"You can't tell how each division is performing - how much the Dutch are making and how much the British are losing. We do have confidence in the chief executive, but by putting a Dutch representative on the board, Mr Usmanov wants the whole group to share in the experience of the successful Dutch operations." Mr Usmanov yesterday insisted Mr Van der Velden would be an independent board member.

A number of changes have already taken place at the company that have reduced its British influence. Philippe Varin, the chief executive, last month replaced a third of his top 50 executives, resulting in a 12 per cent drop in the number of Britons among its senior team.

Mr Usmanov is said to have no plans to insist on the closure or sale of Corus's UK operations, but Farhad Moshiri, who runs Gallagher Holdings, the investment vehicle that holds Mr Usmanov's Corus stake, said Mr Usmanov did want to see overheads reduced and the company streamlined.

Some analysts believe it would be too costly for the company to exit the UK. But the mystery surrounding Mr Usmanov's investment has raised alarm among unions. Its Teesside plant is thought to be most at risk. Michael Leahy, the general secretary of the ISTC, has written to Mr Usmanov asking for a meeting to discuss his intentions for his investment. Corus made 1,300 redundancies in the UK last year but still employs 25,400 people here.

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
PROMOTED VIDEO
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
ebooksAn unforgettable anthology of contemporary reportage
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?