As part of its process to determine the optimal long-term business mix for the company Outokumpu completed a strategic review of the Long Products business area. The review required strategic investigation of multiple options for Outokumpu’s SMACC and ASR facilities in Sheffield including opportunities for implementing a turnaround program, consolidation within the stainless long products markets, and rationalisation of the production asset base.
- Outokumpu Stainless Limited
- Type of project
- Long Products strategic business review
- UN SDGs
- 6, 7, 8, 9, 12 & 13
Recognising Outokumpu’s position as the leading global producer of sustainable stainless steel, Sweco’s appraisal was driven by ensuring ecological, social, and economically sustainable solutions were central to the process, whilst achieving a balance with the demands placed on the business by global market uncertainty.
Led by our due diligence advisory services team, Sweco helped Outokumpu develop a clear understanding of how past and current environmental performance, legacy issues and reasonably foreseeable future regulation could materially impact continuing operations, impact business models and valuation in the event of sale.
Of equal importance was to determine the scale and extent of site closure and remedial actions, should a decision be reached to cease operations.
With a wide range of options under consideration, Sweco provided key information to the Client’s senior management team, external stakeholders and interested parties to allow them to complete an assessment of costed environmental risks and liabilities associated with a complex blend of operational, divestment and closure scenarios.
The strategic review required appraisal of the practicalities required to achieve separation of certain business activities on one site, taking into account land ownership and planning constraints, provision of separate access and independent power supply. This provided the opportunity for Sweco to introduce our transport and infrastructure planning specialists to the project.
Determination of the timeframe over which realisation of costs may be required facilitated an appropriate valuation and financial provision to cover these eventualities, enabling Outokumpu to assess environmental and technical matters in parallel to wider commercial factors.
Navigating the early stages of COVID-19 restrictions, required Sweco to adopt flexible and nimble approaches to project delivery, whilst maintaining strict confidentiality at a sensitive time for the local workforce.
Providing close engagement with the Client’s UK team and the senior management team in Finland included delivery of virtual presentations summarising the principal outcomes of the review, informing Outokumpu’s decision to initiate a business turnaround initiative, preserving steel-making and jobs in Sheffield.
- Assessment of environmental liabilities & financial impacts
- Strategic evaluation for sale of the business, temporary cessation of manufacturing & potential closure
- Environmental Permitting, services & infrastructure planning, solid waste management, contaminated land & regulatory compliance
Many thanks to Sweco for a good working relationship with results delivered on time in difficult circumstances (COVID-19)
David Scaife Vice President, Head of Finance, Long Products Division