Forgemasters CEO vows to develop company without loan

THE chief executive of Yorkshire engineering firm Sheffield Forgemasters has described the government’s decision to axe a proposed £80m loan as “a huge disappointment” for the company.

The loan, pledged to Sheffield Forgemasters by the previous government, was to be used to boost the firm’s expansion plans to build parts for nuclear power stations and could have created up to 180 jobs.

The news came as part of the government’s announcement that it was to slash £2bn of projects after a review of Labour’s spending decisions.

Also cancelled was a £13m project by regional development agency Yorkshire Forward to develop the former Outokumpu steelworks site in Sheffield and £12m of funding towards the Sevenstone retail development in Sheffield.

Graham Honeyman, chief executive of Sheffield Forgemasters, said: “The government’s announcement to overturn the loan offered to Sheffield Forgemasters’ plans to install a 15,000-tonne press is a huge disappointment to all at the company.

“While the press would have placed the company at the forefront of civil nuclear manufacture, it is important for us now to focus on other elements of the company’s development.”

He added: “The government clearly has a remit to reduce spending and cut the economic deficit and it is for them to decide how best to do that.

“Sheffield Forgemasters will continue to develop its significant involvement into civil nuclear, thermal and hydro power generation markets and seek other ways to develop the business.”

Forgemasters said the plans would have created skilled jobs and the loan was the largest sum awarded to a single organisation to be cancelled by the new government.

Former Business Secretary Lord Mandelson announced the loan in March and said it would position Forgemasters as one of two plants in the world able to make large forgings for the nuclear energy industry.

Sheffield Chamber of Commerce is requesting urgent discussions with the coalition government, following the decision to halt the three Sheffield projects.

The Chamber, which represents more than 2,500 organisations across the city, is seeking talks to raise concerns about the impact on Sheffield.

Chief executive Nigel Tomlinson said: “This is clearly worrying news for Sheffield, especially the manufacturing and retail sectors.

“We are requesting urgent discussions with the Government and shall be liaising with local MPs to fully discover the extent of these cuts. We want to ensure that at this critical time Sheffield’s voice is being heard.

“Sheffield, like the rest of the UK, needs to rebalance its economy away from the public sector and grow the wealth-creating private sector, with a foundation in a strong, export-led manufacturing base, as well as developing creative and new economy companies.

“The most frustrating part of these cuts is that they fly against this important long-term objective.

“The city and its businesses are resilient and will come through this difficult time. We just need to identify new opportunities.”

Deputy Prime Minister and Sheffield MP Nick Clegg said that the government could not afford to support Forgemasters‘ expansion.

“The truth is that this loan was promised by the outgoing Labour government as a calculated ploy to win support in Sheffield just ahead of the election,” Mr Clegg said.