London — Long steel producer British Steel said Friday it is cutting 400 jobs, blaming a weaker pound for pushing up raw materials costs.
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Despite moving the previously loss-making business -- which was founded in 2016 with assets acquired from Tata Steel Europe by Greybull Capital -- back to profit, the company said it needs to reduce costs "to secure a sustainable future."
"We've made a strong start to life as British Steel but our external environment is constantly changing. For example, raw materials are all traded in US dollars, so the weakening of the pound and euro have implications for us," CFO Gerald Reichmann said.
The company said it remains committed to making significant investments in its core products -- rail, wire rod, construction and special profiles -- along with its iron and steel-making operations.
No plant closures are being considered, it said.
"We've already committed GBP120 million [$157 million] to capital expenditure projects and are pressing ahead with the GBP50 million upgrade to our Scunthorpe Rod Mill, which we announced in July," executive chairman Roland Junck said. "However, the pace of change we need in this challenging industry requires further and continued investment along with more agile and efficient operations."
As part of the streamlining, managerial, professional and administrative roles in the UK, Ireland, France and the Netherlands, will be reduced. Other steps include continuing to improve manufacturing performance and increasing turnover through strong sales.
"Strong market conditions support the approach we're taking -- we have a robust order book and continue to secure significant contracts with customers, old and new, around the world," Reichmann said.
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