Steel's stainless character

David Bowen reports on the dark horse who has led the British manufacturing giant to a 90% profit rise
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The Independent Online
When Brian Moffat became chief executive of British Steel in 1991, industry observers raised a collective eyebrow. Moffat, everyone knew, had got the job by default. The man who had been groomed for it, Martin Llowarch, had left in mysterious circumstances, so the unassuming finance director had moved into the top job for lack of anyone else. "In an industry where operational people generally get to the top, he was felt to be a bit of a dark horse," one expert says.

The inevitable comparisons with John Major's near-invisible rise to Downing Street were made. Like Major, Moffat - now 57 - is still firmly in place. Unlike Major, his reputation has risen steadily, and a week ago he received proof that he had at least not made any huge boo-boos by being knighted. Whether he got more pleasure from this or from the other big news of the week - British Steel's pre-tax profits up 90 per cent to pounds 1.1bn - is moot. As a cross between two notably undemonstrative breeds - accountant and steel man - he is not the sort of man who wears his heart on his sleeve.

But in any case the steel watchers' eyebrows were lowered many years ago, and Sir Brian is now seen as a thoroughly good thing. The City likes that fact that he is not a steel man to the core, unlike his craggy predecessor, Sir Robert "Black Bob" Scholey, while the industry is encouraged by the feeling that he has grand plans for British Steel.

Rory Sweetman, an analyst with Gerrard Vivian Gray, who used to work with Moffat when he was finance director, says his strength lies in his mixed background. "He is both a steel man and an outsider," he says. "It is quite difficult to come into the industry and survive." He credits Moffat with changing the group from being "a very efficient steel maker but not a good plc" when it was privatised in 1988 to being "a proper stock exchange company" now.

In the old days, he says, British Steel bosses would want the best, whatever the cost. "His attitude is that if you can make nearly as much for half the spend, do it. Because of his efforts, not too much cash will be going out of the door even in a downturn."

This year, steel prices are falling once again but, Sweetman says, "the group will stay usefully profitable even if the downturn is very sharp". Certainly, some of British Steel's recent investments have provided a remarkable bang for the buck. A pounds 22m investment at the Llanwern works will unplug a bottleneck and increase capacity by 1 million tonnes a year - making up the production lost when Ravens-craig was closed in 1991.

A steel industry source praises him for a rather different reason: "He has enlarged British Steel's international presence substantially." It is this expansion abroad that could, if successful, transform Moffat's reputation from one of competence to one of vision. He would undoubtedly like to be seen as the man who created the first multinational steel giant. British Steel is already the most efficient steel producer in Europe (and is exceeded worldwide by only a handful of companies, notably in South Korea). It also has plenty of beans in the bank, thanks largely to Moffat's careful stewardship.

Steel has traditionally been a national industry, often state-owned and rarely straying outside its own market. There is a handful of small multinationals, such as ISPAT of India, but Moffat wants his group to be the first of the majors to spread itself around the globe. Characteristically, the investments he has made so far are not huge - but they could lay the groundwork for something much bigger.

The company has gone into three projects in the US. The most important has been to join up with an American and a Japanese company to form Trico, which is building an advanced type of plant that does not need a "cold" finishing mill. If it works, it could prove a model for further expansion, most notably in Asia. Moffat is already looking for partners in this, the fastest-growing part of the world. "The thought of putting plants in those regions is quite exciting," he says.

His father was a Scottish foundry manager with the wonderful name of Festus, who moved south to Ashton-under-Lyne, to look for work. Young Brian went to Hulme Grammar School and, having discarded the idea of becoming a vet because of the lengthy training, became an accountant.

He got a job with Peat Marwick Mitchell and found himself specialising in oil and steel. In 1968 the newly re-nationalised British Steel was looking for a number cruncher at its London office; Moffat was just married and needed the money, so he agreed to move south.

Two years later, he was sent to the Shotton works in North Wales. His lucky break came when the works director fell ill and he was asked to stand in. Hurling away his ledgers, he set about learning about steel making, and soon caught the manufacturing bug. Bob Scholey, then running the South Wales operations, spotted him and in 1976 he was put in charge of Port Talbot - a huge works with notoriously bad industrial relations.

Moffat took on the unions and won - though this was less to do with his own efforts than with the recession that pushed the corporation to the brink of extinction in 1980. That meant he could push through mass redundancies, cutting the work-force from 13,500 to 4,500 in 10 years, and bring Port Talbot from the bottom to the top of the international productivity tables.

Scholey was now chairman of the corporation, and in 1986 he persuaded a reluctant Moffat to come to London as his finance director. By now BSC was sufficiently successful to be considered for privatisation, and Moffat worked closely with the City in the run-up to the 1988 float.

But he was still not expected to take over as chief executive when Scholey retired in 1991. It was only when Martin Llowarch left (he is now head of Johnson Firth Brown) that the job became vacant. Two years later, Sir Alistair Frame was forced to resign as chairman because of ill health, and Moffat took that job, too.

His style could not be more different from Scholey's. He has, one observer says, "a typical rather fusty accountant's exterior and has a very dull speak- ing voice". He is, however, "friendly and warm" in conversation. He keeps his work and home life separate - travelling from Chepstow where he breeds pigs on a 30-acre farm.

He has had to show plenty of toughness over the last few years, frequently excoriating European steel makers that have refused to cut capacity. He has also had to put up with the usual flak aimed at privatised industry bosses. His pay rose by 55 per cent in 1993-4, and the following year he was paid pounds 521,000. But when, last summer, he made pounds 1.1m from cashing in share options, the flap in the press was not as fierce as it might have been, reflecting a suspicion that perhaps, just perhaps, he deserved it.

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