MORE than 400 jobs are on the line at a steel firm with sites in Newport and Tredegar.

Liberty Steel has it it moving forward with the next phase of its "restructuring" programme - which will include converting the Newport site into a storage, "distribution and trading hub", and could affect up to 440 jobs.

The firm has operations in Newport and Tredegar, with more across the UK.

Liberty, part of the GFG Alliance, said it will offer an alternative to redundancy through a programme which aims to retain, redeploy and reskill affected workers.

The company says workers will be offered a level of guaranteed salary and outplacement opportunities, with the intention of being redeployed within Liberty Steel UK on previous employment terms when market conditions allow.

The company said the measures will forge a “viable way forward” for the business and help safeguard jobs in its wider workforce of 1,900 permanent employees, and up to 5,000 including contractors.

Jeffrey Kabel, chief transformation officer for Liberty Steel Group, said: “Refocusing our operations will set the right platform for Liberty Steel UK’s high-quality manufacturing businesses to adapt quickly to challenging market realities.

“The support of our marquee customers will enable us to produce high-value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy.

“We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a two million-tonne green steel hub.

“While our action is expected to regrettably impact the roles of some of our workforce, we will provide a level of guaranteed salary and out placement opportunities through our unique Workforce Solutions programme as an alternative to redundancy.

“Liberty’s shareholder Sanjeev Gupta has supported the business through a very difficult period and remains committed to the workforce here in the UK and ensuring our lower carbon operations help deliver a sustainable, decarbonised UK steel industry.”

Liberty said in a statement: “Despite the injection of £200 million of shareholder capital over the last two years, the production of some commodity grade products at Rotherham and downstream mills has become unviable in the short term due to high energy costs and imports from countries without the same environmental standards.

“Primary production through Rotherham’s lower carbon electric arc furnaces (EAFs) will be temporarily reduced while uncompetitive operating conditions prevail.

“These actions together with the idling of Liberty Performance Steels in West Bromwich and the reconfiguration of Liberty Steel Newport into a storage, distribution and trading hub, may potentially impact up to 440 roles across the business.

“The company will consult with employee representatives, trade unions and UK Government throughout the process.”

In November last year, Liberty Steel announced an agreement with creditors to restructure its global debt.

At the time, the steel group's chief transformation officer, Jeffrey Kabel, said: "After several months of negotiations, we have now reached an agreement in principle that will provide recovery for the creditors and will significantly de-leverage and de-risk Liberty.

"This is a major step forward in our restructuring and transformation and we will now work at pace with the creditors to prepare and execute the agreement."

Alun Davies, national officer of steelworkers union Community, said: “This announcement is a body blow to Liberty Steel’s loyal UK workforce, who couldn’t have done more to get the company through an exceptionally challenging period.

“Since the collapse of Greensill Capital, the trade unions have supported the company because we believed that delivering the company’s business plans – which were audited and backed by the unions’ independent experts – was the best route to safeguard jobs and the future of all the businesses.

“However, the plans we reviewed were based on substantial investment and ramping up production, including at Liberty Steel Newport, and did not include the ‘idling’ of any sites.

“These are challenging times for all steelmakers but the company’s decision to change their plans, on which we based our support, and announce a strategy seemingly based on capacity cuts and redundancies, is devastating.

“The consultation on these proposals must be meaningful and the unions will be scrutinising the detail of plans to idle Newport, West Bromwich and Tredegar, including Liberty’s commitment to restart the plants when conditions allow.

“Government must play their part, stop the dithering and act to deliver the competitive energy prices our industry so desperately needs. Steelworkers have had enough of warm words, it’s past time for government to decide whether it wants a steel industry in this country.”

Additional reporting by Alan Jones, PA Industrial Correspondent