Historic manufacturer told to end Russian energy contract
Sheffield Forgemasters, which was acquired by the Ministry of Defence (MoD) in July last year, has reportedly been told by the UK government to terminate an energy contract with the Russian state-owned Gazprom in the wake of the ongoing invasion of Ukraine.
Although run by an independent board, the business which was acquired due to by the MoD due to its ongoing work relating to the UK’s Trident submarine fleet, it is understood that ministers expect the contract with Gazprom, who supply the Sheffield-based business with gas, to be stopped.
This would force the manufacturer, who recently spoke at TheBusinessDesk.com’s Invest North conference about the importance of innovation, to find a new gas supplier during a period of wholesale fuel prices are continuing to rise. The decision to terminate the contract which dates back to 2006 when the Russian firm first entered the UK market and was amended in 2013 would also likely incur penalty charges.
Sheffield Forgemasters’s CFO Steve Hammell, said: “We can confirm that Sheffield Forgemasters has ceased all product supply into Russia and as global energy markets react to the Russian invasion of Ukraine, the board is reviewing its energy supply as a matter of urgency.”
The pressure on the manufacturer comes as the chancellor Rishi Sunak called for a stop on investments in Russia by UK businesses in the wake of the country’s invasion of Ukraine, and ahead of any official sanctions on Russian gas companies, although it is understood that the government is “exploring options” to end the country’s reliance on Russian gas.
Other regional businesses have already moved to suspend trade in Russia including Yorkshire Tea and Harrogate Spring Water, with a spokesperson for the former stating “Our Ethical Trade and Human Rights Policy states that our values guide how we work with suppliers, customers and distributors. It includes the provision that we will not trade with individuals, entities, regions or countries where UK sanctions have been applied.
“While Russia has been an export market for some of our teas for several years, as a result of the invasion and the subsequent sanctions we’ve suspended trade.”
