Forgemasters Loses Financing for 15,000-mt Press

Sheffield Forgemasters International Ltd. has lost a promised $119-million U.K. government loan it had counted on to help finance a new 15,000-mt press. The new press, announced in March, was seen as a way for SFIL to compete in the global market for ultra-large forged components needed in nuclear power projects. The loan had been secured with the former Labour government in the U.K., but the new, Conservative-Liberal Democrat coalition government installed in early May has instituted a round of government spending cuts in order to reduce Britain’s budget deficit. The new government’s energy secretary, Chris Huhne, called the project "a very strong commercial deal … I don't see any reason why it shouldn't be able to be financed from financial markets.” SFIL CEO Graham Honeyman, called the reversal “a huge disappointment,” and said, "Sheffield Forgemasters will continue to develop its significant involvement into civil nuclear, thermal, and hydro power generation markets and seek other ways to develop the business." There is a significant global demand for forged components for nuclear reactors, specifically for reactor pressure vessel heads, the massive units that cap the chambers in which nuclear fuel is combusted to generate heat that produces steam to power turbines. The demand is not only for components to be installed in new or planned reactors; there is also demand for components to replace pressure vessel heads in aging nuclear power plants. In March, Honeyman had explained that “"the world's capability to make large and ultra large forgings for the nuclear industry is currently restricted to the equivalent of five to seven reactor supply systems a year. However, the average nuclear construction rate between 2010 and 2030 is expected to be 13 new reactors a year.” Currently, only five companies in the world are capable of producing such large-scale components, including Japan Steel Works Ltd. and Doosan Heavy Industries in South Korea. SFIL is an accredited supplier of components to nuclear power plants. The new press would join its 10,000-mt press, which is limited to supplying smaller components for the emerging class of larger reactors, such as the Westinghouse Electric Co.’s AP1000 reactor and Areva’s European Pressurized Reactor. Westinghouse has said it plans “to make a substantial contribution” to SFIL’s project.