Undated handout photo issued by British Steel of a British Steel worker in Scunthorpe, as the company reported a profit of £47 million just a year after its launch and is to give workers a 5% stake in the business after a "remarkable" transformation. PRESS ASSOCIATION Photo. Issue date: Thursday June 1, 2017. The company, owned by investment firm Greybull Capital, completed the purchase of Tata Steel's Long Products Europe business exactly a year ago, with losses of £79 million in the previous financial year. See PA story INDUSTRY Steel. Photo credit should read: Steve Morgan/British Steel/PA Wire NOTE TO EDITORS: This handout photo may only be used in for editorial reporting purposes for the contemporaneous illustration of events, things or the people in the image or facts mentioned in the caption. Reuse of the picture may require further permission from the copyright holder.
An acquisition would tie into British Steel’s strategy of acquiring 'downstream' businesses. © PA

British Steel is looking to take a first step into American manufacturing with a bid for a US producer of carbon and alloy wire, the Financial Times has learnt.

The privately-owned company is considering an offer for Johnstown Wire Technologies, which makes product used in automotive industry, power distribution, steel wool, screws and fences.

An acquisition would tie into British Steel’s strategy of acquiring “downstream” businesses that process basic steel into value-added forms of the metal. British Steel declined to comment.

The move comes at a time of high steel prices in the US as a result of President Donald Trump’s imposition of tariffs on metal imports, the cornerstone policy of his pledge to revive the country’s manufacturing base.

This has boosted earnings for steelmakers with domestic operations, such as Nucor and ArcelorMittal, but it has also eaten into profits at car manufacturers who are paying more for materials.

Johnstown Wire is based in Pennsylvania and was formed from assets originally belonging to one-time industry giant Bethlehem Steel. Its revenues are estimated at $61.2m, according to D&B Hoovers, a business information database.

The company did not respond to inquiries. Aterian Investment Partners, the private equity group that has owned Johnstown Wire since 2014, declined to comment.

Gaining a foothold in the US would be a significant development for British Steel, which was reborn two years ago when the Indian conglomerate Tata sold its struggling European long products division for £1 to the investment firm Greybull Capital. The new owners renamed the business in homage to the former titan of UK industry.

Based at the giant Scunthorpe steelworks in northern England, it makes steel for railways, construction and other industries, with manufacturing sites also in France and the Netherlands.

The new British Steel returned to profit in its first year of independence, but has since suffered setbacks.

Last year, a technical problem at one of the Scunthorpe plant’s blast furnaces weighed on profits. Earnings before interest, tax, depreciation and amortisation fell by more than half to £21m, even as revenue increased 17 per cent to £1.4bn in the 12 months ended 31 March.

The company is cutting 400 management and back office jobs, almost 10 per cent of its workforce, as part of a “streamlining process”.

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