DOZENS of new jobs are set to be created after Sheffield Forgemasters was finally granted a Government loan to expand its production facilities - but the company will receive £36 million instead of the £80 million loan so controversially cancelled 16 months ago.
The announcement was made at the company’s Brightside Lane base by Sheffield Hallam MP and Deputy Prime Minister Nick Clegg, who has taken a huge amount of flak locally about the decision to cancel the old loan.
Peter Birtles, group director at Sheffield Forgemasters International Limited, said the loan would allow the company to purchase new machines and equipment to expand its business.
Forgemasters is one of three local applicants for Regional Growth Fund cash who have been successful.
Across the country, 119 applicants were yesterday told they would receive a share of £950 million in the second round of grants from the fund.
Ministers hope the successful schemes will create a total of 200,000 jobs.
Mr Clegg, who toured Forgemasters in a hard hat and met apprentices at the company, said: “Sheffield Forgemasters is a world-beating company and an integral part of our city’s proud manufacturing heritage.
“I am delighted that the Coalition Government has been able to help Forgemasters expand its business into new products and markets.
“For too long, politicians have been in thrall to one square mile of the City of London at the expense of the rest of Britain.
“Initiatives like the Regional Growth Fund will start restoring the balance and give outstanding companies like Sheffield Forgemasters the future they deserve.”
Mr Birtles said: “We have nothing in writing yet. Up to £36m has been agreed as a potential loan. Now the detailed plans will be put together and there will be due diligence tests by lawyers from ourselves and the Government.
“No money is likely to change hands before next year. While we do not know exactly how many new jobs will be created, it will be in the tens not hundreds but will nevertheless be a significant boost for the local economy.”
Mr Birtles said the company’s plans will cost more than £40 million and would not have been affordable had the company been forced to take a commercial loan.
It will take up to two years to develop the additional manufacturing facilities at Forgemasters.
He said: “The Government loan is at a subsidised rate although the exact level of interest is yet to be decided.”
Mr Birtles added the company may resurrect its plans for a new 15,000 tonne forging press to make large castings for the nuclear industry but at a future date depending on market conditions.
He said: “The time is not right now, things have moved on and demand has changed particularly after the Fukushima incident in Japan.”
Forgemasters is the only UK company carrying certification to manufacture castings for the civil nuclear industry.
Sheffield Brightside and Hillsborough MP David Blunkett was less enthusiastic about the announcement
He said: “This Government cut by two thirds the amount available for investment in growth and regional development. They are cutting £220 million from Sheffield City Council’s budget in addition to this, and they now have the cheek to announce they are putting back a tiny fraction of the money that’s already been withdrawn.
“To give back a tiny fraction of what has been taken away and parade it as being ‘new money’ and a great gift from the Government, is quite clearly fraudulent.”