Sheffield Forgemasters - 2010 Expansion

2010 Expansion

Due to increasing demand for their specialist services, in 2010 the firm commissioned a new 4,000 ton forging press, with plans to increase the range of forgings they can supply.

On 17 March 2010, Lord Mandelson announced that the UK Government would loan the company £80 million at a low 3.5% interest rate towards the design and building of a new 15,000 ton forging press (together with other investors). The press, intended to give Forgemasters the ability to manufacture ultra-large forgings for the nuclear power industry, would allow the UK to use home-manufactured components during the building of proposed new nuclear power plants in the country. According to The Engineer, as of 2010, there was only one other manufacturer in the world, Japan Steel Works, with the adequate presses and certification able to manufacture all the required ultra-large forgings, however the World Nuclear Association stated that very heavy forging capacity was also operating in China and Russia, and was under construction in France and South Korea.

Following the United Kingdom general election, 2010, held on 6 May, the new Government announced a Treasury review of all Government decisions on funding since 1 January, aimed at reducing the country's budget deficit in response to the preceding financial crisis and concerns over sovereign debt, which led to a period of uncertainty about the expansion's future. On 17 June 2010 Chief Secretary to the Treasury Danny Alexander announced the cancellation of 12 projects totalling £2 billion agreed to by the previous Labour government, including the £80 million loan to Sheffield Forgemasters. The Secretary of State for Business, Innovation and Skills Vince Cable explained the reason was that the project required very large loans and promised extraordinary rates of return with little risk investment by Sheffield Forgemasters, and given the financial situation the government could not support this. Forgemasters' chief executive stated that the project was not economic using private finance, and was unlikely to go ahead without government loans.

In an interview with BBC Radio Sheffield, Deputy Prime Minister Nick Clegg said the Government may reconsider loaning the company money for expansion. However in 2011, following the Fukushima Daiichi nuclear disaster, the company decided to no longer try to finance a 15,000 ton forging press due to uncertainty about the future of nuclear energy.

On Monday 31 October 2011, the Government announced new lending of up to £36m to the firm, as part of £950m of investment nationwide from the Regional Growth Fund for a variety equipment in areas like the melt shop, forge and the machine shops.