Hargreaves starts Monckton site consultation process

STAFF at the country’s last independent coke plant will be handed notifications of potential redundancies as a consultation process gets underway.

Last month, Hargreaves Services, which runs the 130-year old Monckton complex near Barnsley, confirmed its intention to review the future of Monckton, which it says continues to suffer from a period of “unprecedented turmoil in European coke markets.”

“Although discussions continue with key export customers, a significant change in both market conditions and customer demand would be required to secure the plant’s future,” it said.

Hargreaves said that although Monckton continues to benefit in this financial year from a number of higher priced legacy contracts and was budgeted to make a profit of £2m, the outlook beyond this year is “very poor given current market prices.”

“If the decision is taken to proceed with closure, whilst the current year profit would be reduced to nil reflecting the cancellation and rescheduling of a number of customer contracts, the closure would result in the unwinding of significant working capital tied up in the business. The combined impact on FY15 and FY16 of this working capital unwind would be in excess of £22m. The cash flows over this period would be partly offset by cash closure costs of approximately £3m and remediation costs of £1.8m,” said Hargreaves.

Gordon Banham, CEO of Hargreaves, said: “Hargreaves acquired Monckton in 2005. Whilst great progress has been made by the team in improving efficiency and environmental performance over the past ten years, the coke markets have become increasingly challenging for the business. I have worked closely with the management team and it is with great personal sadness that we find ourselves having to start this consultation process.”

The consultation process will last for a minimum of 45 days.