Sheffield Forgemasters: Ministry of Defence to acquire steel firm

Steel company Sheffield Forgemasters is set to be nationalised in a £2.6m deal with the Ministry of Defence.

The government said it intends to invest up to £400m in the historic business for "defence-critical plant, equipment and infrastructure" over the next decade.

The 215-year-old manufacturer plays a key role in the UK's nuclear submarine supply chain.

Unions said the move would end years of instability for the firm.

The acquisition, which is subject to a three-week offer period, is due to be completed on 19 August.

David Bond, chief executive officer at Sheffield Forgemasters, described it as an "important milestone" for the company, South Yorkshire and UK manufacturing as a whole.

"We will still be able to operate on a full commercial portfolio as well as defence," he said.

"We'll be a public corporation and what that allows us to do is to get the government to invest in the business on a scale we could never achieve as a private company."

The Ministry of Defence (MoD), which will acquire 100% ownership of the parent company, said the eventual aim was to return the business to the private sector.

The 10-year investment from the MoD will be used to modernise the plant and its equipment to support its role as a long-term supplier to UK defence, a spokesperson added.

The Unite union said it had "waited two years" for the news and described it as a "huge sigh of relief" for steel communities.

Steve Turner, assistant general secretary for manufacturing, said: "It brings to an end years of instability for this historic company, but is also a sign that government is maybe finally waking up to a crisis of its own making.

"Critical infrastructure industries like steel function better in public hands and advanced economies like our own need to have stable, secure domestic steel production capabilities to protect our national security interests as well as to compete in global markets."

Sheffield Forgemasters is synonymous with a city that prides itself on being the heart of steel manufacturing in the UK.

This announcement has not only saved crucial high-skilled jobs for the area, but has given the potential to create more, too, as the MoD has made a commitment to developing new lines in future investment.

But the impact on Sheffield City Region is a happy by-product and not the reason the government has decided to step in and save the company.

It's about securing a supply chain for the naval and nuclear sector, from a government increasingly willing to wade into industries it considers to have national security implications.

Dan Jarvis, Mayor of South Yorkshire, said: "While today's announcement is most welcome, ministers also need to attend to the future of two of our other steel plants which hang in the balance as a result of the crisis at Liberty Steel.

"The facilities at Stocksbridge and Rotherham have enormous potential and I will continue to fight for the South Yorkshire steel industry and work to protect all the jobs and businesses they support."

Gill Furniss, Labour MP for Sheffield Brightside and Hillsborough, whose constituency includes the Forgemasters site, said the move would help "protect Sheffield's proud status as the city of steel".

She tweeted: "This is an important investment to secure specialist local jobs and an acknowledgement of Forgemasters' key role in the defence industry."

Roy Rickhuss, general secretary of the Community trade union, said: "The pandemic has showed us the danger of relying on fragile overseas supply chains, so we are pleased to see a viable future secured for Sheffield Forgemasters."

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