Friday, May 27, 2016

News: Pension changes key to UK steel industry's future

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The Government has launched a consultation on changes to the British Steel Pension Scheme (BSPS) - the huge pension liability with a £700m deficit that could be a deal-breaker for prospective buyers of Tata Steel's UK assets.

The consultation follows intense discussions between Tata Steel, the UK government, the pension scheme trustees and regulators to find the best option for members of the scheme.

At the end of March, the Indian-owned steelmaker concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. The formal process began on April 11.

The consultation is seen as the first step in a potential unprecedented change to regulations which would enable the scheme to modify its benefits enabling it become self-sustaining and remain outside of the Pension Protection Fund - the safety net that provides compensation to members of eligible defined benefit pension schemes when things go wrong.

The scheme has 130,000 members. Of these, 14,000 are active (i.e. they are currently employed by Tata Steel or another sponsoring employer of the scheme), 32,000 are deferred (i.e. no longer employed by Tata Steel but below the scheme's normal pension age and with a pension not in payment) and 84,000 are pensioners.

The consultation states that: "According to December 2015 figures, the scheme has assets of £13.3 billion and liabilities based on running on with a solvent sponsoring employer of around £14 billion, so has a deficit estimated at around £700m on a technical provisions basis. However, the scheme is around £1.5 billion short of what would be needed to buy out benefits equivalent to Pension Protection Fund compensation levels (this is known as a section 179 basis in pensions legislation). The deficit to buy out the benefits in full is estimated to be around £7.5 billion."

Proposed changes would enable the Government to cut billions from longer term liabilities by switching the indexation of pension increases from the RPI inflation index to the usually lower CPI measure.

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The consultation adds: "Were Tata to sell Tata Steel UK, it is highly unlikely that a purchaser would be willing to take on the pension scheme as a part of the deal – the cost and risk to the purchaser would be too high for a successful sale. The scheme therefore needs to be separated from Tata Steel UK."

Tor Farquhar, human resources director for Tata Steel's European operations, said: "This is an important step forward which would enable a better outcome for the vast majority of members of the British Steel Pension Scheme than the benefits provided by the Pension Protection Fund. The consultation is also an important step that supports the prospect of securing a sustainable future for Tata Steel UK’s 11,000 employees."

The steel trade unions – Community, Unite and GMB issued a joint statement: "It is important that all stakeholders continue to explore all available options that avoid the need for the scheme to go into the PPF, which would be the worst deal for scheme members. We will seek to work constructively with the UK Government and the scheme trustees to deliver the best possible deal for our members. We need to ensure that there are cast iron safeguards in place so this unique situation does not result in employers dodging their pensions responsibilities.

"It is important to remember that Tata Steel remains the employer and sponsor of the BSPS. They have significant legal, social and moral responsibilities with regards to the British steel industry and those men and women who have worked and continue to work within it."

Strike action at Tata Steel was averted last year when members of all four unions at Tata Steel voted to accept changes to the BSPS which saw the scheme remain open.

Tata Steel website

Images: Tata Steel

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News: £7m Green Business Fund to cut costs and save energy for British businesses

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The Carbon Trust has launched a new £7m Green Business Fund and local firms can hear about how it can be used to save energy and cut costs at an event in Rotherham next week.


The Carbon Trust is a not-for-dividend company that provides expert advice, footprinting and technology services to help business, governments and organisations worldwide cut carbon emissions and costs.

The fund provides vital capital for smaller businesses to replace old, power-guzzling equipment, together with expert advice to boost the efficiency and productivity of businesses in England, Scotland and Wales.

The £7m fund has been made available to SMEs on a first come-first served basis, and will offer energy saving training, cost saving assessments, implementation advice, and capital support for the installation of energy efficiency equipment. Eligible companies can apply for a capital contribution to cover up to 15% of an energy efficiency project or equipment replacement cost, up to a maximum of £10,000. 

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The fund can also be used to purchase a range of equipment, including energy efficient lighting, Heating, Ventilation and Air Conditioning (HVAC) and energy efficiency controls – vital equipment across a range of business sectors, including manufacturing, retail, and hospitality. 

The scheme is expected to support 1,000 to 2,000 smaller businesses across England, Scotland and Wales. It is expected to enable participating businesses to invest £55m in energy saving projects which would deliver them lifetime energy savings of almost £130m. The programme will focus on high quality implementation to ensure the best energy efficiency opportunities are fully realised.

Hugh Jones, managing director, Advisory, at the Carbon Trust, said: "Our experience of working with thousands of companies across the UK indicates that year-on-year savings of 20% to 30% can be delivered through action on energy efficiency.  We'd encourage smaller companies to apply to make the most of the fund on offer in order to realise significant savings on their bottom line."

South Yorkshire Police's Training Centre - Robert Dyson House - is hosting one of the first Green Business Fund two hour workshops for SMEs to learn how to make the most of the funded services available, and apply for up to £10,000 capital contribution towards energy efficient equipment purchase, plus how to identify opportunities to reduce energy costs.

The Manvers workshop takes place on June 2 at 9:30.

Carbon Trust website

Images: Carbon Trust

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News: Gearing up to mark Rotherham Hospice's 20th year

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A production manager for the local branch of Signs Express is getting back in the saddle to undertake a mammoth bike ride to raise valuable funds for Rotherham Hospice.

Based at Templeborough, Signs Express pride themselves on their expertise and innovative solutions to help businesses come up with perfect signage solutions, tailored specifically to their requirements.

The only adult hospice in Rotherham for the people of Rotherham, Rotherham Hospice is an independent charity and must raise significant sums of money each year in order to pay for the quality care provided free of charge to patients, their families and carers. The charity needs £5m a year with £2.2m needed to be raised each year through voluntary support.

Gareth Russell, production manager at Signs Express, took on a cycling challenge in 2014 for Rotherham Hospice and raised an amazing £5,000. This September he will join a team of 50 fundraisers as part of the "Big 20" - so called as it is the Rotherham Hospice's 20th anniversary.

Partnering with specialist charity event organisers, Skyline Events, the 345 mile trip from London to Paris also includes a stop at Rotherham's twin town, Saint Quentin on day four before the cyclists arrive in Paris on day five.

Gareth said: "It's an amazing experience. The French roads are great for cycling, and all the cyclists ride into Paris together. It's a fantastic atmosphere."

Donations can be made at Gareth's Just Giving page.

Also set to take on the fundraising challenge are Christopher Duff, chief executive at Rotherham Hospice and GP, Ted Daly, a trustee at the hospice.

A number of fundraising events are taking place throughout the hospice's 20th year. The anniversary ball, recently held at Aston Hall Hotel, raised £16,000.

An official launch event recently took place for the Tree of Life - an imposing, unique sculpture in stainless steel created by Yorkshire Man of Steel designer Steve Mehdi. Inspired by the shape of a tree in the hospice garden and intended as a commemorative artwork, the three metre tall structure will support over 290 individual leaves which can be dedicated in memory of a loved one.

The unique fundraising venture has already raised some £20,000; numerous bereaved relatives whose loved ones received hospice care have paid for engraved leaves and sections of bark to be placed on the tree in their memory.

The Tree of Life was made of steel donated by Outokumpu and built with the help of Newburgh Precision Engineering. Maher Ltd provided the tubular steel frame, JF Finnegan built the foundations with help from Peter Brett Associates. Mark Smithson transported the tree to the site and TPA Portable Roadways and PP Engineering lifted the three tonne tree over the fence into the hospice garden. The tree will glow at night thanks to ASD Lighting and there was also help from the apprentices at the University of Sheffield Advanced Manufacturing Research Centre, We are Branding and Performance Engineered Solutions. Pryor Marketing have engraved all the leaves and the bark.

"We all could help, so we did," explained Vince Middleton, MD of Newburgh, who dedicated the company's best welder, Paul Smith, to the task of fabricating the tree from the donated stainless steel and alloys.

"Paul did a brilliant job. It took 200 hours, working under the guidance of sculptor Steve Mehdi. We all felt privileged to be involved in a project which is so creative and which will do a great deal of good for many years to come."

Former Outokumpu MD Jamie Sharp, who has also pledged to supply the steel leaves and bark for a minimum of two years, added: "The tree brings art and industry together and shows the beauty and everlasting quality of stainless steel, a material first created in South Yorkshire."

Signs Express website
Rotherham Hospice website

Images: Rotherham Hospice

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Thursday, May 26, 2016

News: Tata reports on tumultuous year for UK steel

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Tata Steel has reported its financial results for the fourth quarter and full year ended March 31 2016, the period which included the shock announcement that it was putting its entire UK assets up for sale.

Tata Steel has for a long time been warning that continuing cheap imports risk undermining Europe's steel industry and that uncompetitive energy costs and the strength of sterling are hurting its UK operations.

At the end of March, the Indian-owned steelmaker concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. The formal process began on April 11 with contact made with 190 potential financial and industrial investors worldwide.

Seven bids were immediately taken forward to the next stage of the sale process but the Tata board, which met in Mumbai yesterday remains tight-lipped on the next stage of the process.

Koushik Chatterjee, Group Executive Director (Finance and Corporate) at Tata Steel, said: "Apart from the sale of some of the portfolio holdings during the year, the company has been actively reshaping its European portfolio. In April 2016, the Company signed a conditional sale agreement with Greybull Capital for the Long Products business of Europe, the process of the sale is currently ongoing.. The Company through the Tata Steel Europe Board is also reviewing all options for the UK Strip supply chain including a potential sale process which is under active consideration."

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Turnover for the European operations for the fourth quarter of 2016 was down from the previous quarter and from the same quarter of the previous year.

EBITDA (Earnings before taxes), saw Tata's European operations post a loss of £37m for the last quarter, a slight improvement from the £68m loss in quarter three but still down on the £106m profit posted in the fourth quarter of 2014.

With turnover down to £6.8 billion, EBITDA for the whole financial year saw a loss of £70m, a big turnaround from the £434m profit in the 2015 financial year.

The report stated: "Tata Steel Europe saw stable operational performance and deliveries in Q4 increased by 6% compared to Q3. In response to the import and price pressure, a tactical decision was made to focus on higher-value sales in the UK, rather than volume."

Speciality Steels in Rotherham and Stocksbridge has a £275m of turnover and is Tata Steel Europe's only Electric Arc Furnace (EAF) based business, specialising in carbon, alloy and stainless steels for demanding applications like aerospace, motorsports and oil and gas. Until recently it employed over 2,000 people. It is not considered a downstream business linked to Port Talbot and Tata Steel's strip products.

Hans Fischer, MD & CEO of Tata Steel in Europe, said: "We continued to invest in our customers over the last year by developing our manufacturing capability and by launching more than 30 new products. Our portfolio of new products is now approaching 150.

"We made further strides to improve the efficiency of our operations resulting in record productivity in various plants. We also took action to focus on higher-value sales and sales of differentiated products, which are now above a third of our total sales.

"Growing European steel demand was undermined by continued surging imports in 2015 – imports into the EU rose so fast that domestic deliveries declined, and prices came under further pressure. That's why it is vital the European Commission and national governments continue to strengthen action against unfair trade."

Tata Steel Europe website

Images: Tata Steel

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News: Amazon brings one-hour delivery to Rotherham

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Internet retail giant, Amazon, has launched its ultra-fast delivery service to South Yorkshire which means that online shoppers in Rotherham can receive selected goods on the same day as ordering.

First launched in London in 2015, the "Prime Now" service allows customers to order thousands of daily essentials, household products and gift items using an app. Amazon Prime members spending more than £20 can then choose same-day, two-hour delivery windows for no additional cost.

One hour delivery is now available in selected postcodes for an additional £6.99 delivery fee.

South Yorkshire becomes the 10th location in the UK to receive the service.

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To fulfil its delivery obligations, the retailer has started creating an "urban logistics network" consisting of units typically ranging in size between 10,000 sq ft and 100,000 sq ft around the towns and cities where it wants to operate its new services - which in time could include every location in the UK.

Property Week reported earlier this year that the number of urban logistics centres Amazon owns has risen rapidly from 13 at the end of 2014 to 24 today and that Amazon is working with CBRE on its acquisitions drive.

Amazon's Doncaster Fulfilment Centre is based at Firstpoint, a distribution park just off of J3 of the M18. At 415,000 square feet, it is the size of five and a half football pitches. A new 250,000 sq ft facility is located on Water Vole Way, Doncaster.

In addition, a new delivery station opened last year in Sheffield at Victory Park.

In April, Amazon UK Services Ltd applied for a premises licence for the sale of alcohol off site from a 10,200 sq ft unit at Aldwarke Wharf in Rotherham.

It followed an agreement with supermarket Morrisons that is set to see hundreds of Morrisons products made available to Amazon Prime Now and Amazon Pantry customers.

Amazon Pantry is a store where Amazon Prime members can shop for groceries and household products in everyday package sizes for set delivery fees.

Last year, Amazon began delivering fresh chilled and frozen food within 60 minutes of ordering in selected London postcodes, testing out Amazon Fresh - the retailer's US grocery delivery service.

The Amazon group's total UK sales came in at a staggering £5.3bn for 2015.

Amazon website

Images: Amazon

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