Sir Terry Matthews made a fortune in the technology sector with a string of companies including Mitel Corp., Corel Corp. and Newbridge Networks, which he sold in 2000 for $7-billlion (U.S.) in stock. Now, Sir Terry is returning to his roots in Wales for what may be his greatest challenge yet: trying to revive Britain’s largest steel plant.
Sir Terry has created Excalibur Steel UK Ltd., and he’s rounding up investors to buy the troubled Tata steel mill in Port Talbot near Swansea. Tata put its British operations up for sale in March, saying the division, which includes three steel-making facilities, was inefficient. The Port Talbot plant is the largest, employing roughly 15,000 people directly and indirectly.
The challenge for any buyer is daunting. The integrated plant, which makes strip steel used in auto manufacturing, construction and appliances, is outdated and losing about $2-million a day. Energy costs are twice as high as elsewhere in Europe and steel prices have plummeted because of oversupply from China.
“I’ve never been one to shy away from some kind of a fight,” Sir Terry said in an interview from his office in Ottawa. He added that he chose the mythical name Excalibur deliberately because it’s “a sword that was invincible.”
Sir Terry, 72, is convinced the plant can be turned around and he points to a restructuring plan that was rejected by Tata officials because it involved nearly $200-million in upgrades.
“In my view, everything I’ve heard says that a turnaround plan could work well,” he said, adding that the operation could be profitable in two years. “I would say steel is a critical and strategic item in the U.K.”
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