I move that the Bill be now read a Second Time. The House is aware of the purpose of this Bill. It will be recollected that, in advance of its introduction, the House on 22nd March, 1960, and 19th July, 1960, voted a total of £1,500,000 to enable the Minister for Finance to purchase shares in Irish Steel Holdings Ltd., and thus put that company in a position to purchase plant and put other work in hands in connection with its expansion plans.
It is, no doubt, known to the House that the company was incorporated in 1947 to acquire the assets of Irish Steel Ltd. and maintain the steel works at Haulbowline as a going concern. The company has been financed by bank accommodation, of which £150,000 is guaranteed by the Minister for Finance, by a loan of £150,000, similarly guaranteed, and by the trading profits of the company since its inception.
The company operates open hearth furnaces to produce, largely from native scrap, mild steel ingots and billets which are then converted by rolling into angles, rounds, flats and squares. Flat and corrugated galvanised sheets are produced from imported sheet. The soundness of the industry has been confirmed by the successful progress of the company over the past ten years. Accumulated net profits up to 30th June, 1959 are over £600,000 and the assets of the company were valued by outside valuers at nearly £1 million.
For some years, the company has been considering plans for development and expansion of the industry and latterly has pursued its investigations with consultants employed for the purpose. Proposals were drawn up and tenders obtained from firms of international standing. These tenders form the basis of the company's statement of costs.
The main proposals are:
(a) increase of ingot output to 80,000 tons per annum of 30 cwt. ingots from the present figure of 23,000 tons per annum of 3 cwt. ingots. This will involve the installation of a new 60-ton furnace, the improvement of two existing 37-ton furnaces and extension of scrap handling;
(b) installation of a new 750 mm blooming mill and a new 650 mm large section mill, with the necessary ancillary gear to roll billets, blooms, sheet bars and large sections;
(c) rearrangement and mechanisation of the existing merchant bar mill to improve its rate of working and to enable it to feed a wire rod mill;
(d) installation of a modern wire rod mill;
(e) completion of an incomplete sheet mill already in the company's possession. This mill was acquired in an incomplete condition from Irish Steel Ltd., the company's predecessors.
The output and efficiency of working will be increased by these means and the range of products extended. The 80,000 tons of ingots per annum will give about 65,000 tons per annum of end-products, of which it is intended to dispose as to 45,000-50,000 tons on the home market and 15,000-20,000 tons on the export market. The company's successful experience in the export market encourages confidence that in normal conditions there should be no difficulty in securing export outlets for whatever portion of production is not absorbed in the home market. This confidence is shared by the export agents who handled the company's previous export business.
On the basis of carefully and conservatively derived costs of production, the company has reached the conclusion that its delivered prices should be competitive with those for imported steel when the plant is working at its true efficiency and planned output. Employment in the expanded steel-works is expected to be over 700 persons at peak periods, or 200 more than at present.
It is expected that the total cost of the work and plant necessary for this implementation of the company's development and expansion programme will be of the order of £3½ millions. It is proposed to provide the sum necessary, less £99,000 which the company will provide from its own resources, by the purchase of shares by the Minister for Finance. In addition, the company will require working capital and for this purpose the Bill empowers the Minister for Industry and Commerce, with the consent of the Minister for Finance, to guarantee borrowings by the company not exceeding £500,000 at any one time.
I think that there will be general agreement that this successful industry should be fostered and encouraged to expand. Its importance from the point of view of providing employment is apparent from the figures I have already quoted. Quite apart from questions of employment, however, the steel mill at Haulbowline fills a gap which would otherwise exist in our industrial capacity. It produces a basic product, principally from indigenous raw materials, and represents a valuable insurance against our being deprived of essential supplies of steel should we be unable to obtain supplies from foreign sources at any future time of international difficulties. Furthermore, we may hope that the existence in this country of this basic stage of the steel industry with its special skills and technologies will be a favourable factor in the development here of the engineering and other steel-using industries. For all these reasons, I confidently recommend the Bill to the approval of the House.