Several hundred jobs could be slashed at British Steel by the company’s likely new owners as part of efforts to improve its poor productivity, the Financial Times has reported.
Ataer Holding, the investment arm of Turkey’s military pension fund Oyak, was unveiled on Friday as the preferred buyer for the steelmaker which collapsed in May. Ataer now has exclusive rights to look into British Steel in greater detail and plans to complete the purchase by the end of the year.
Toker Ozcan, head of the mining metallurgy group at Oyak, told the FT that the group’s immediate focus will be to boost output. He declined to comment on the scale of possible job losses but said productivity at British Steel’s main plant in Scunthorpe is “very low” compared with other European steel producers.
“I am not focused on headcount but on productivity,” he said. “We will take productivity to where it needs to be.”
The plans could result in several hundred job cuts, according to two people with knowledge of the talks quoted by the FT.
British Steel employs around 5,000 people, most of them in the UK. More than 3,000 work at its Scunthorpe plant.
Oyak could not be reached for comment.
The FT also reported that Ataer is in talks with the UK government about a “financial contribution” to help make British Steel’s plants greener, by converting them to run on hydrogen. First, the plants will need to switch from coal to gas, Mr Ozcan was quoted as saying.
“We would like to convert at least 50 per cent of the capacity to gas-based steel,” he said. Then, he added, “with the efforts of the UK government, we want to convert from gas to hydrogen”.
He said: “Our ambition is to go from carbon to lower-carbon to zero. We will be leading the way to produce clean steel.”
A spokesperson for the UK’s Department for Business, Energy and Industrial Strategy declined to comment, saying these are “commercially sensitive” discussions.
The UK has pledged to reach net zero carbon emissions by 2050 but its actions are lagging far behind what is needed to meet that target, according to a recent report to by the Committee on Climate Change, an independent adviser to the government.
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