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Thailand's Sahaviriya agrees to buy UK slab plant - 27 August 2010

Corus has signed a memorandum of understanding to sell its Teesside Cast Products (TCP) plant in the UK to Thai steel producer Sahaviriya Steel Industries. The proposed acquisition, valued at around $500m (£322m), will give SSI ownership of the plant which can produce 3.5m tonnes/year of slab.

Slab is expected to be shipped to Thailand, which is located in the strong South East Asian growth market. SSI is entirely reliant on outside sources of slab, and its current suppliers include Japanese and CIS companies. This deal is expected to secure 500-100 jobs directly and many thousands more indirectly.

Mr Win, owner of SSI is well known for his entrepreneurial flair. He told SBB that he hopes to “conclude the deal as soon as possible”, but some issues are still to be resolved.

One of the stumbling blocks in the talks, Steel Business Briefing understands, has been Corus’ insistence on inserting non-competition clauses into any agreement, meaning it would be difficult for SSI to establish a finishing mill at the site.

Steel Business Briefing’s Managing Editor Roger Manser comments, “this move highlights the global nature of the steel market, and Europe’s potential as a competitive place to produce steel.”

TCP has been mothballed since February 2010, and has been endangered since a consortium of offtakers withdrew from a long-term supply contract.

 

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