Lord Swaraj Paul owned steel firm Caparo is the latest victim of the global steel crisis as it enters administration, Sky News reported
Today’s announcement brings the total recent job losses related to the steel industry to 5,300 after redundancies at Redcar, Scunthorpe and Scotland earlier this month. Hundreds more UK jobs are set to go as the axe falls on jobs across the UK including the West Midlands.
The company, which is owned by Labour peer Lord Paul, produces a number of steel products. Due to overcapacity in the Chinese market the price of steel has fallen by by 40% from around £318 a ton to under £191 in the past year, meaning that domestic firms are no longer able to compete.
Caparo reported an annual operating loss of £700,000 for 2014 as compared to the previous year’s profit of £3.1m. However, its UK operations posted much higher operating losses at £2.5m, compared to the £1.7m profit made the previous year.
The directors’ report said: “The majority of the decline in underlying UK operating profits reflects the difficult trading conditions … for the commodity-based businesses; these businesses typically perform better when steel prices are increasing. The second half of the year saw rapid falls in steel prices and adverse exchange movements.”
Apart from steel, Caparo operates businesses in various verticals such as product development, materials testing services, hotels, media, furniture and interior design, financial services, energy and private equity investment.