A history of positive response

The 1990s were, in general, good years for British Steel plc, despite the continuing cyclicality of the industry that could still produce loss making years. By and large shareholders had opportunities to prosper and the privately-owned company continued to modernise and rationalise, so much so that at times the company was held up as a model for the rest of the world’s steel makers. Meanwhile, the national players in a still-fragmented European and global industry were unable to cope with economic troughs and maintain the heavy capital expenditure the steel industry required. There arose an increasingly obvious need for the industry as a whole to free itself of state aid and to consolidate, which was recognised by the European Commission’s shift in policy towards accepting "one-time last-time" state aid in exchange for removal of state ownership together with rationalisation and support for cross-border mergers.

In 1999 British Steel plc and Koninklijke Hoogovens N.V. merged to form Corus in the largest European steel industry merger to date. Together they formed Europe’s second largest steel maker and the world’s fourth largest. In the first few years of the new millennium the global steel demand balance oscillated wildly and by 2003 Corus was in severe difficulty. The company adopted a programme of strategic reforms called "Restoring Success," which aimed at going beyond a mere adaptation to new market conditions. This 3-year programme restructured the Group’s UK operations to give a focus on three core sites: Scunthorpe, Port Talbot and Rotherham. One of the key decisions was the closure of the hot end at Llanwern. By 2005 Corus had returned to profit and restored value to shareholders.