Ken Skates, Cabinet Secretary for Economy and Transport
This was published under the 2016 to 2021 administration of the Welsh Government
I am pleased to inform Members of two major offers of funding to steel producers from the Welsh Government. We have provided over £4m of skills funding for Tata Steel in 2017-18 to support further development of the workforce. The Welsh Government’s continued investment in skills development for the company is intended to enable real efficiencies to be delivered across the Welsh plants as well as provide direct support to individuals. It will provide additional training that will enable the organisation to become more innovative and introduce advanced manufacturing and engineering techniques into the business to improve levels of efficiency, productivity and cost effectiveness. It will also increase the flexibility and capacity of the workforce.
The award of further skills funding means that to date we have offered funding of £17m across Tata Steel’s Welsh operations. Along with support for skills development, this includes investment in the power plant at Tata’s Port Talbot plant to increase energy efficiency and reduce carbon emissions, and R&D funding for new product development.
We continue to work closely with Tata Steel on other specific packages of potential support. With the exception of funding for skills support, Tata will not be able to draw funding against these offers until we have agreed the detail of overarching legally binding conditions.
In addition, we have recently made a significant offer to Celsa in Cardiff for environmental improvements that will help reduce the amount of energy used. Not only will this have a positive impact on carbon emissions but it will reduce Celsa’s energy costs. Celsa is a major employer in Cardiff, employing over 800 people and is the largest manufacturer of reinforced steel and wire products in the UK. The company produces around 1.2m tonnes of steel annually from recycled scrap, using an electric arc furnace process, a process that is energy intensive. At this time, the offer of funding is subject to formal acceptance by the company. We also announced today Welsh Government funding of £100,000 to BRC Reinforcements, part of the Celsa Group, to increase productivity at its Newport plant and create and protect 35 jobs.
On 8 February, the First Minister opened the new Steel and Metals Institute in Swansea University. The Institute, which has been supported with Welsh Government funding of just over £2m, will enable businesses across Wales to collaborate in the development of new products and processes as well as increase the number of researchers employed in Wales by businesses using the facilities.
The facilities at the Institute will provide a substantial resource for Wales and reinforce our position as a region with progressive steel and metals research capability and helping to secure a more sustainable future for the sector. It will put the sector in a strong position to bring competitive won funding into Wales, for example Innovate UK funding. The capability of the equipment provides potential for it to be utilised by the steel sector as a whole – from primary steel and metal producers to the downstream businesses and wider supply chain.
The Steel Institute builds on wider R&D support we have given the metals industry. This includes Swansea University’s state-of-the-art IMPACT research hub based at the Swansea Bay campus. The total cost is some £35m, supported by £17.4m of EU funds and includes a Metal Technology Centre which will benefit the metal supply chain in Wales will include equipment that is set up to service predominantly lower technology readiness level work.
The Welsh Government has also provided support to the SPECIFIC initiative in Swansea University undertaking exciting research and innovation that will lead to a transformation of the construction industry and that will change the way buildings are designed, built and used. Tata has been a key partner within SPECIFIC since it started as a collaborative project with Swansea University. The Welsh Government has supported SPECIFIC through two rounds of funding as an UK Innovation and Knowledge Centre and continues to support its ambition to deliver buildings as power stations.
Alongside the significant investments that we have made as a Government in both facilities and also direct funding for companies, a priority for the Welsh Government in terms for further R&D support for the steel industry is working with the sector and Universities to attract more of the UK research budget. The budget has been increased until 2020, primarily due to the Industrial Strategy Challenge Fund.
Our new Economic Action Plan – and our calls to action – have been designed in part to help Wales develop new platforms and new partnerships between government, universities, colleges and businesses that can allow us to go after more of that competitively awarded funding, as well as new UK Industrial Strategy challenge funding.
I will continue to keep Members updated as matters progress.