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Cut-price acquisition

Two BiFab yards in Harland & Wolff deal

Harland & Wolff is extending its UK footprint

Two of the three BiFab yards have been acquired by Infrastrata which owns the Belfast ship repair and offshore construction company Harland & Wolff and the Devon yard Appledore.

An £850,000 deal has been struck for the Methil and Arnish yards, but not the Burntisland facility.

The new owner will take on 29 remaining employees.

BiFab went into administration after failing to pick up work on a new offshore facility and despite receiving £52 million of Scottish government support which will now come under further scrutiny.

The new owner is paying £650,000 in cash for the assets with a further deferred consideration of up to £200,000 in cash, subject to achievement of future revenues targets.

These Scottish facilities will trade under the Harland & Wolff brand and will help the company deliver on its existing strategy for a UK-wide footprint quicker than it would have done with only its two existing sites

Management believes that the shipbuilding strategy that it has put in place is closely aligned to Government policy and could lead to some large contracts, both from Government and the private sector.

Accordingly, a number of negotiations are currently taking place on shipbuilding contracts, conversion projects and significant fabrication works.

It is also anticipating new work in the offshore sector. Harland & Wolff has seen a significant increase in the number of enquiries from wind farm developers for fabrication capabilities across its sites.

Burntisand Fabricators

The Burntisland site is not included in the deal

John Wood, CEO of InfraStrata, said: “With this acquisition, we now have a footprint in Scotland, which is the hotbed for major wind farm projects as well as for shipbuilding programmes.

“We have now positioned ourselves strategically across the UK, with four sites capable of servicing our five core markets.

“This acquisition gives us the flexibility to optimise our operations across the Group and offer our clients the ability to fabricate faster and de-risk their exposure by offering multiple sites. As we move into larger contracts, it is crucial that we demonstrate the capacity to bid for and deliver on these projects.

“The acquisition of Bifab’s assets delivers that capability to us and will open up a larger demographic of tender opportunities.

“Most importantly, it is expected to substantially boost our existing sales pipeline success rate given that the fabrication risk carried by the project developers will drop significantly since we will now be more favourably located geographically than others.”

Trade unions Unite and GMB have demanded concrete actions by the Scottish and UK Governments to strategically support the offshore wind sector.

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The trade unions criticised the announcement by the Prime Minister in October 2020 to commit 60% of the turbines to be manufactured in the UK as ‘empty rhetoric’ without a review of Contracts for Difference (CfD), which should include local content and enforcement clauses.

They also cited the various powers relating to planning, renewables energy, procurement, the Crown Estate and Marine Scotland which the Scottish Government should be using to exercise greater leverage in the contractual process.

Unite Scotland Secretary Pat Rafferty and GMB Scotland Secretary Gary Smith said: “The announcement by InfraStrata that two of the BiFab yards will be bought out of administration is welcome news. It is also testimony to our members and their communities who have fought hard to keep these yards alive.

“We look forward to working with the company to ensure it is primed to win contracts for the offshore wind sector, and to having a positive working relationship underpinned by the Fair Work principles.

“We have always believed that the BiFab yards, and indeed yards and ports all over Scotland, are uniquely placed to capture the benefits of the offshore wind sector.

“However, the story so far has been one of government failure – thousands of jobs and billions of pounds have been outsourced around the world when Scottish communities should have been benefitting from these contracts. Now the Scottish and UK Governments have been given a reprieve and they need to step-up and support the new ownership.

“We urgently need an overhaul of the Contracts for Difference process to ensure local supply clauses are in-built at the outset of major contracts as part of a proper industrial and investment plan for the sector, otherwise the green jobs revolution will remain a fantasy.”

Scottish Liberal Democrat leader Willie Rennie said: “The potential is great with all the new wind farms on the verge of construction off the shores of Scotland but the yards need significant investment to make them competitive with yards from the far east.

“Questions from the Scottish Government remain. Just how much of its £52.4million investment in BiFab will be recouped as a result of this sale? The BiFab saga has been yet another example of the Scottish Government’s cack-handed management of a company that had so much potential squandered.”

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Scottish Labour economy spokesman Alex Rowley said: “Scottish Labour will continue to fight shoulder to shoulder with the workforce for the high-skill, high-pay jobs that Scotland so badly needs. We also believe the yard at Burntisland has a future and will work to get that yard up and running as well.

“The SNP’s mismanagement of our manufacturing base cannot be overstated and the damage done to so many communities across Scotland is plain for all to see.

“Scottish Labour urges both the UK and Scottish governments to work together and support the sector to develop the jobs that we need to kickstart the economy and ensure a fair transition to green energy.”

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