Dudley steel business uses MGP support to implement an energy reduction strategy | Manufacturing Growth Programme

Steelstrip Services Limited (trading as) Servosteel are the largest independently owned steel toll processors in the UK. They are based on a 200,000sq ft premises, located in Dudley, at the heart of the West Midlands and accessible to an incredible network infrastructure.

The business became a limited company in 2003, and then privatised in 2014. Furthermore, in April 2022 the business went through a management buyout (MBO) via their existing management team. Throughout the change, the well-managed business has kept everything running as smooth as usual.

One of the key challenges for Servosteel is that of escalating energy costs. These costs affect both the overall cost of processing materials and the cost of running the business. As a business they need to reduce costs to enable them to navigate difficult periods.

Servosteel process 500,000 tonnes of steel per annum, creating a turnover of £20m per year. Their processing service facilities include three slitting lines, three de-coiling lines, a coil pickling line, three lasers and a press brake. Servosteel are the UK’s only steel processing facility to have a coil recovery via the SCS line (smooth clean surface).

Servosteel decided to work with the Manufacturing Growth Programme (MGP) to investigate the possibility of generating their own energy and gain support to form their net zero strategy.

Helen Fortune, Manufacturing Growth Manager for MGP, guided Servosteel through a GROWTHmapper® business diagnostic review. The results of the review showed the team to be well-aligned, their recent MBO meant their strategy was on point. However, one outside factor that was not included in the business diagnostic review was the cost increases in energy usage. Helen had a deeper conversation with Servosteel to allow her to better understand the issues Servosteel faced.

Following on from the review with Helen Fortune, Operations Director, Darryl Macready decided the improvement project they wanted to embark on was to decarbonise their operation. The project involved investigating the possibility of inhouse generation of electricity and replacing their steam generation boilers.

Helen has built up a long-standing relationship with the business, Helen has assisted with various projects to help Servosteel to grow.

The outcome of the project should significantly reduce Servosteel’s grid electricity supply requirements to run their production processes as well as address the replacement of the aging steam raising boilers. Once the initial investigations had taken place and the strategy was defined, the investment required from the business to implement the required changes could have been between £250K -£750K.

However, the initial investment would have a positive impact on the business, significantly reducing their current and future energy bills and reliance on the grid, as well as the obvious environmental benefits and improved reliability compared to the existing equipment.

Helen Fortune, commented, “I have worked with Servosteel on several business improvement projects, they are a very driven, forward-thinking company and have a strong management team leading them. Their strategising and future planning is second to none.”

When asked “Have you created any new jobs recently?”, Operations Director, Darryl Macready responded:

“We have employed a total of 6 apprentices in the last 6 months. This is a new venture for us, but something we want to further develop in terms of numbers as well as key skills & knowledge to help develop the business while also helping the apprentices grow into our industry.”

“As we develop our strategies for the future of Servosteel under our new ownership we expect further job opportunities to arise.”

Darryl Macready continued, “Do not hesitate to contact and use MGP. They have proved invaluable in our projects in the past, and always add value to anything we have discussed or planned.”

Servosteel plans to include further investment into their plant and equipment, along with their aspirations to become Net-Zero. Their decision making and future planning has these two items front and centre.

The business has recently invested in purchasing their third laser. This has meant increased capacity in their schedules, whilst also providing customers with shorter lead times and competitive pricing.

Find out more about Servosteel here: www.servosteel.com