British Steel’s white knight eyes up Port Talbot

Port Talbot SteelworksJust over six months after taking over British Steel’s Scunthorpe operations, China’s privately owned Jingye Group is now eyeing up the struggling Port Talbot steel works in South Wales. Jingye’s chairman and owner Li Ganpo first offered to buy the Scunthorpe steelworks last year with a pledge to rescue about 3,000 jobs and inject £1.5bn into its modernisation. He is now said to be in informal talks with Indian multinational Tata (which came into ownership of Scunthorpe’s sister site when it bought the Anglo-Dutch steel concern Corus in 2007) and the UK government, presumably with a similar deal in mind.

Although almost unknown outside China, Ganpo founded the Jungye Group in north China’s Hebei province nearly 25 years ago, and has since grown it into a largely domestic conglomerate with a 27,000-strong workforce and a turnover of nearly $19bn. Along with steel, Port Talbot’s suitor is also active in international trade, powder metallurgy, 3D printing, tourism and hospitality. The Scunthorpe acquisition was its first significant overseas investment.

Tata, which also owns Jaguar Land Rover and Tetley Tea, has tried repeatedly to sell Port Talbot and has been in talks with the government for months about a rescue plan after deciding that it could not afford to keep funding its losses, even before Covid-19 came along to crush demand.

Jingye’s expression of interest in Port Talbot could therefore offer the Welsh steelworks and its 4,000 employees a much-needed lifeline and they can only hope that the commitment and long-term intent that its CEO  Li Hiuming expressed after the completion of the Scunthorpe acquisition ends up applying to them as well. “It has not been an easy journey since we first announced our intentions in November.” Hiuming said back in March. “But the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world.” The deal marked the “beginning of a new illustrious chapter” in the history of British steelmaking, he added.