Steel Sector Round Table minutes: November 2020

Attendees and apologies

Attendees

• Jamie Hepburn MSP,Minister for Business, Fair Work & Skills
• Gareth Stace, Director General, UK Steel
• Russell Hall, Senior Research Fellow, University of Warwick
• Claire Davis, Professor Thermo-Mechanical Processing, University of Warwick
• Chris Hagg, Chief Business Development Officer, CELSA Steel
• James Van Der Graaf,External Affairs Executive, GFG Alliance
• Steven Grant, Sales Manager, Proclad
• Kenny Hall, Dir of Finance & Admin, Vallourec Oil & Gas
• Melanie    Fauvel MD, Vallourec Oil & Gas
• Ewan MacGregor, Economist, Zero Waste Scotland
• Geoff Crowley, Development Director, Highland Galvanizers & Colour Coaters
• Ian Harding, Brown & Tawse Steelstock
• Kenny Jordan, Regional Officer, Unite the Union
• Nick Leake, Scotland Office
• Alastair Semple, Scottish Manufacturing Advisory Service (SMAS)
• Gail Duff, Account Manager, Company Growth - Global, SE
• Alastair Gillen, Skills Development Scotland
• Alasdair McDiarmid, Operations Director, Community Union
• Harish Patel National Officer, Unite the Union
• Cara Davidson, Planning, SG
• Graham Porteous, Procurement, SG
• Fraser Lawson, Strategic Industrial Projects, SG
• Elisabeth, Stark Head of Manufacturing & Construction, SG
• Kia Jamieson, Modern Apprentice, Industrial Sectors, SG
• Mary Maxwell, Executive Officer, Industrial Sectors, SG

Apologies 

• Gordon McGuinness, SDS
• Simon Armstrong, Sales Director – Conductor & Domestic, Edgen Murray
• Ronnie Blake, Managing Director, the Blake Group
• Gordon MacRae, Managing Director, Liberty Steel Dalzell
• Martin McHugh, Chair, Martec Engineering
• Gary Cook, Regional Officer, GMB Scotland
• Paul Warren, Regional Organiser, Community Union
• Gordon Haldane, Financial Controller, Proclad Int Forging
• Steve Thompson, Scotland Office
• Ross Murdoch, National Officer, GMB Manufacturing Section
• John Mitchell, Aberdeen Fabrication
• Tim Simpson, Murray Steel
• LucyCarruthers, BEIS

 

Items and actions

1. Welcome & Introductions

Mr Hepburn (JH) thanked everyone for attending, noting that the steel sector was hugely important to Scotland.

He reminded everyone that the Short Life Working Group (SLWG) had been set up with two objectives:

• to repurpose the Steel Sector Round Table (SSRT), which has resulted in new people being invited on to the SSRT and who are most welcome.
• to commission research into the steel sector in Scotland, which has resulted in a series of recommendations being put forward by the SLWG which are to be considered at the meeting today.

2. Update on Short Life Working Group

JH invited Gareth Stace (GS) of UK Steel to speak to the work of the SLWG.

Gareth stated that he was pleased with the range of expertise attending the meeting and that UK Steel are appreciative of the support that the sector receives from the SG.

Gareth felt the Scottish Steel Sector Report was most interesting and was keen to hear Dr Russell Hall’s presentation.  He felt that the SLWG had put forward an excellent series of recommendations based on the report.

UK Steel believe that increased visibility and understanding of the procurement pipeline and particularly of what types and grades of steel will be required in the future would very much help the indigenous steel industry; and there is a particular interest in the opportunity to supply steel for offshore windfarms.

The UK Steel Key Issues Briefing which was circulated prior to the meeting lays out where UK Steel believe that Procurement can help the sector.

3. Steel Sector in Scotland  (Dr Russell Hall)

Dr Russell Hall gave a presentation on his report on the Scottish Steel Sector.  The presentation was very well received and generated a significant amount of discussion.

Comments & questions:

• the sample size of companies used in the research was queried.  There was also a concern raised that Companies House data might not give a full picture as, for example, Brown & Tawse are registered as operating out of Dundee, but in fact they have several sites. Russell Hall (RH) explained how the sample was identified and that he believed it was representative. 
• the report indicates that consumption of steel is predicted to rise and there was some discussion as to who is best placed to take advantage.  RH indicated that the opportunity is huge and that the UK definitely has a chance to capture some of that opportunity: the question is which market sector we choose to focus on. 
• Claire Davis (CD) pointed out that a lot of the global increase in the use of steel will be in emerging markets such as India.  She believes it is best for the UK Steel sector to look at steel products with higher added value. 
• GS pointed out that we make a huge variety of steel in the UK and that the sector could make more types and grades of steel if it knew in advance what major government projects needed: the industry could pivot to supply those projects with the appropriate steel products.  He felt it would be useful to refer back to the report which BEIS commissioned from Grant Thornton, called ‘Future Capacities and Capabilities Of The UK Steel Industry’, which lays this out.
• Ian Harding (IH) asked if we have any research into value added by steel. Latest figures available at the time of the research showed that the sector contributed GVA of £2.8 billion to the economy and £3.6 billion in the supply chain.
• although steel produces a lot of waste a fair percentage of that waste is reusable: though there is a significant amount of waste that currently cannot be reused.
• there was a general view that the cost of electricity is key to the success of the sector.
• IH – in terms of encouraging supply chain activity he considered tax incentives to be a good method.  He had pushed for increased capital allowances to allow for investment.
• although demand is projected to increase at present there is still a global surplus of steel.
• there were concerns that a EU Exit no-deal would leave the UK exposed to imports of cheap steel.
• it was suggested that the use of green taxes for steel shipped across the world would reduce the attractiveness of imports.

4. Way Forward for Steel

GS opened discussions on the three recommendations put forward by the SLWG for consideration by the SSRT.  These were:

• public procurement opportunities
• growing the steel sector
• addressing skills gaps and shortages.

GS made the point that addressing skills is a longer term issued and that the way to grow the steel sector is to understand the opportunities afforded by scrap steel.  The focus in the short term should be on procurement where there is the a possibility of increasing opportunity for the use of UK steel quite quickly.

• SG has signed up to Steel Charter which has the following pledges;
  • help ensure the best possible economic benefit to the UK economy by increasing GVA in UK manufacturing supply chains.
  • unlock the social, environmental and economic benefits of shortened and localised supply chains.
  • promote and facilitate the use of UK produced steel in construction & infrastructure projects.
  • support highly paid, skilled manufacturing jobs and training opportunities in communities across the UK.
• The UK Steel Key Issues document which was circulated prior to the meeting lays out where procurement can be leveraged to help the sector:
  • set targets for the UK steel content of major public projects.
  • establish a stated preference for the use of UK produced steel, with a requirement for developers/contractors to provide reasoning where UK steel has not been used.
  • all steel specifications to be published in UK norms rather than European norms.
  • The Procurement Policy Note (PPN) on steel should stipulate that the tendering process for steel works contractors should include requirements for them to provide supply chain plans, advertise steel supply opportunities and report on the origin of steel ultimately used.
  • Contracts for Difference (CfD) energy projects should be brought within the scope of PPN.
     
• Mr Hepburn suggested that the opportunities afforded by procurement changes would be better discussed in more depth with Gareth separately. 
• The Minister noted that the SG is in the process of refreshing the Future Skills Action Plan and that it would be good to build in to that plan the skills that will be required in the steel sector in future.  Those skills include digital manufacturing and data development.
• Alastair Gillen (AG) indicated that Apprentice Frameworks are currently being developed to provide those skills.  RH observed that there is a  large  project, called the European Steel Skills Agenda (ESSA), which is due to produce its final report in the next 6 months which may be of interest.
• The Minister stated that the Scottish Government would look to progress all three recommendations put forward by the Short Life Working Group.

5. AOB

• IG indicated that the definition of steel stockholder is narrow and dated and that steel stockholders add value to the stock; they don’t just store it.
• Mr Hepburn thanked everyone for their attendance and input and indicated that the minutes and actions would be circulated shortly and an update on how the SG had progressed their actions would be provided thereafter.

Action:  Scottish Government will make representations to UKG about the need for a wider UK steel sector approach.

Action: The Minister will have a follow-up meeting with Gareth Stace: officials will arrange a call to take place in the near future.

Action: Skills – opportunities to build skills that will be required for steel industry in future into Future Skills Action Plan.

Action: SG officials will investigate recommendations from SLWG and will report back to SSRT.

Action: Minutes of meeting with actions will be published shortly.