The globally renowned Sheffield Forgemasters has its origins in the 1750s as a small blacksmith forge. In 1805, George Naylor set up the foundations for the business as a commercial operation with the building of the Millsands Steelworks. His son-in-law, Edward Vickers, later joined forces with him to form Naylor Vickers and Company. By 1870, the River Don Works was one of the two largest engineering steel enterprises in the world. The latter half of the 19th century was a time of rapid and voluminous growth in the railroad industry in the United States. Consequently, much of Vickers’ success was due to U.S. demand for railroad equipment. Queen Victoria herself visited the facility in 1897.
The operation continued to grow into the 20th century. By World War II, output reached new heights in support of the war effort. After the war, the business developed a new range of products, including turbine rotors and boiler drums for power stations and ships; railway suspensions and couplers; high-performance rolling-mill rolls and other steel-plant products; and components for the world’s first nuclear power station. The River Don Works was renationalized in 1967 into British Steel. New business was developed, including castings for the offshore oil industry. In 1983, Firth Brown amalgamated with the River Don Works to form the private-sector company Sheffield Forgemasters, employing a workforce of 6,500. Sheffield Forgemasters is now capable of producing the largest and most technically challenging cast- and forged-steel components in the world.
In late July 2021, an announcement was made by the U.K.’s Ministry of Defence (MoD) that it would launch an offer to acquire Sheffield Forgemasters International Limited (SFIL). The agreement was to allow the government to refinance and take control of the company to secure the supply of components critical to the military and security interests of the MoD, as well as to secure future defense programs.
The MoD announced at that time its intention to invest up to £400 million over 10 years to maintain and update critical aspects of the plant, its equipment and its infrastructure. Considering the expertise and critical capabilities associated with SFIL, and its stature as a strategic manufacturing asset, the company was assessed by the MoD to be “the only available manufacturer with the skills and capability to produce large-scale, high-integrity castings and forgings from specialist steels in an integrated facility to the highest standards required” for existing and planned defense programs.
It was made clear that the acquisition would not close off other contractors on bidding for MoD con-tracts in an open and fair bidding process. At the time of this announcement, the MoD had already started working with the company to ensure proper financial oversight toward the company’s future success, with the aim of eventually returning it to the private sector.
On Aug. 19, SFIL’s CEO, David Bond, announced that the MoD’s acquisition of the company was legally completed. It was also announced that the company – now 100%-owned by the MoD – would continue to operate in its current form under its existing executive directors and senior management. Additionally, two new non-executive directors will be appointed, including one from the U.K. government.
According to Bond, “The acquisition secures Sheffield Forgemasters’ role as a key supplier into the MoD for the long-term and is structured to invest substantial new capital into the modernization of defense-critical assets. We will keep employees informed of our investment plans to recapitalize plant and infrastructure through a program of communications as we embark upon this exciting new chapter for the company.”
The bottom line here is that SFIL has been nationalized by the U.K.’s Ministry of Defence. According to Wikipedia, nationalization is the process of transforming privately owned assets by bringing them under the public ownership of a national or state government. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, such as is anticipated with SFIL, they are said to have undergone renationalization.
There is something of a political stigma associated with the concept of nationalization. Economists distinguish between nationalization and socialization, which refers to the process of restructuring the economic framework, organizational structure and institutions of an economy on a socialistic basis. By contrast, nationalization does not necessarily imply social ownership and the restructuring of the economic system. By itself, nationalization has nothing to do with socialism. Historically, states have car-ried out nationalizations for different purposes under a variety of different political and economic systems.
In the case of Sheffield Forgemasters, all I see is a recognition by the U.K.’s Ministry of Defence of an industrial complex that just happens to be a strategic national asset. It needed a larger helping hand to keep going. The ability to manufacture certain items of strategic military and industrial importance in the homeland – especially those not easily sourced elsewhere – underscores nothing but good com-mon sense.
Slideshow courtesy of Sheffield Forgemasters
Editor Dean M. Peters has written extensively on metalworking markets and the issues that affect them. Dean’s technical journalistic experience extends to 40 years, including his time at FORGE. His strong journalistic credentials are enhanced by his BS in metallurgical engineering. He can be reached by e-mailing ForgeEditor@forgemag.com.