SFIL, which is a key supplier to the UK defence industry, has secured the final part of the funding package by way of a Government loan, enabling it to install the country’s first 15,000 tonne forging press to make ultra-large nuclear components.
The announcement to agree the £80m funding, was made by Business Secretary Lord Mandelson at the Sheffield company’s site, attended by industry experts and dignitaries and formed part of the Government’s commitment to backing British manufacturing in growth market sectors.
The Government’s package complements other contributions by key partners of SFIL, including leading nuclear power-plant manufacturer Westinghouse.
The funding agreement places the world’s only independently-owned forgemaster in pole-position to capitalise on huge international demand for safety critical forgings as it joins a group of only five companies capable of producing the largest components for nuclear power reactors.
Graham Honeyman, chief executive at SFIL, said: “The Government loan forms the final piece of a two-year project to finance the installation of a 15,000 tonne forging press which will place the UK at the peak of a global supply chain for civil nuclear manufacturing.
“This is a massive coup for UK manufacturing and firmly underpins the country’s place at the leading edge of engineering technology.
“There are other companies in the world looking to enter the market for these large-scale components, but none will be able to achieve production in the same timescales as SFIL, partly due to the lengthy time it takes to gain international accreditation to manufacture for the nuclear industry.”
The demand for heavy nuclear forgings is set to more than triple by 2020, reaching 70,000 tonnes with worldwide capacity only able to supply 59,000 tonnes over the same timescale.
Graham added: “The world’s capability to make large and ultra large forgings for the nuclear industry is currently restricted to the equivalent of five to seven reactor supply systems a year.
“However the average nuclear construction rate between 2010 and 2030 is expected to be 13 new reactors a year.
“In order to place Britain in a position to capitalise on this deficit, SFIL will push through its plans, within the next three years, to make major castings and forgings for the power generation industry.”
A report in 2009 by business analyst, Frost & Sullivan, highlighted the issues that such disparity between supply and demand demonstrates.
It stated that the main downside of an increase in nuclear projects concerned the availability of heavy equipment and long lead times. The majority of equipment for new generation plants currently comes from international suppliers and nuclear-related entities which have been working at full capacity.
SFIL is the only UK company carrying ASME certification to manufacture civil nuclear castings and forgings and is already providing many components to the civil nuclear industry and the defence industry, enabling it to roll out production of the largest forgings within as little three years from the 15k tonne press’ installation.
In securing the funding, Forgemasters will create hundreds more jobs at its Brightside Lane site. The knock-on effect of having these facilities within UK shores will be many more jobs nationally as suppliers and customers increase their involvement with the company.
The development follows SFIL’s signing of a £30m pound trade agreement to oversee the development of power generation forgings with Indian state run power equipment maker Bharat Heavy Electricals Limited (BHEL).
The 10 year agreement, which helps see the protection of future SFIL markets in the sub-continent, will mainly serve India’s rapidly growing domestic market for turbine and power generation products.
Today’s announcement is subject to final due diligence which will be carried out over the coming weeks.