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By Scott Wright
THE Scottish-based arm of steel company Edgen Murray, which has its roots in the former business empire of Sir David Murray, is being wound down.
Staff at the Newbridge-based division are being consulted over redundancies by Japanese owner Sumitomo Corporation, as the company gradually closes down its Edgen Murray Eastern Hemisphere business.
It is still not clear how many jobs are at risk, though the most up to date accounts for the division show it employed more than 90 people.
The Scottish arm of the business can trace its roots back to 1974, with the establishment of Sir David’s original steel company, Murray International Metals.
The former Rangers Football Club owner sold MIM to US private equity group Jefferies Capital Partners in 2005.
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At that stage, New York-based Jefferies combined MIM with Edgen, a steel stockholding and trading company.
Sumitomo, which is listed on the Tokyo Stock Exchange, acquired the Edgen Group in 2013.
A statement on the Sumitomo website outlining its purchase of Edgen Group states that Edgen Murray was one of two trading brands owned by the acquired company, alongside Bourland & Leverich.
Asked by The Herald to outline what its plans are for Edgen Murray, Sumitomo said: “Sumitomo Corporation decided to wind down Edgen Murray Eastern Hemisphere business.
“As part of the wind down process, EMEH will continue executing its existing backlog contracts but will not take additional new business.
“Edgen Murray Western Hemisphere (EMWH) and EMEH’s HSP valves and conductor activities will not be affected by this decision and process.”
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When asked what the implications would be for the Scottish workforce, the company added: “The Edgen Murray Eastern Hemisphere business is going through a wind-down over a period of time whilst we manage and conclude our existing obligations.
“EMEH Management anticipates it will take until the end of March 2022 to complete the backlog. The employees of EMEH, including ones in Scotland, will be made redundant throughout the course of the wind-down process.
“The company are actively engaged with employees through collective and individual consultations.”
Edgen Group is headquartered in Baton Rouge, Louisiana, and supplies specialised products to the energy and industrial markets, including steel pipe, valves and plate.
Its Newbridge base is home to the company’s largest service centre in Europe and, over two warehouses, holds its largest inventory of plate, sections, pipe and pipe components on the continent, its website notes. It has a long track record of supplying projects in the North Sea oil and gas industry.
The latest accounts for Edgen Murray Europe, which is headquartered in Newbridge, show that it made a loss before tax of £22.46 million in the year to March 31, 2020, following a profit of £1.5m the year before. Revenue increased by 131.5% to £89.26m, but gross margins fell. The accounts state that the company employed an average of 94 staff over the period.
The company said in the accounts: “The year ended 31 March 2020 was another relatively difficult year for both the steel and oil and gas industries, with continuing low prices and margins in the respective commodity markets.
“Although revenue increased for the company, gross margins have decreased.”
The company goes on to state in the accounts that directors were continuing efforts to diversify beyond its historic focus on the oil and gas industry into the civil, renewables, rail and power generation markets.
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