11 hours ago
Wind turbine parts supplier to close in threat to net zero supply chains
A major supplier to Britain's green energy industry is set to close after its Japanese owner failed to clinch a rescue deal for the company and its 250 workers.
Wigan-based Electric Glass Fiber UK (EGFU), which is owned by Nippon Electric Glass (NEG), makes vital components used in wind turbines and electric cars. Its closure puts net zero supply chains under threat.
Both turbines and EVs are seen by the Government as critical to its industrial strategy amid moves to decarbonise the British economy and to build up domestic supplies of critical products at a time of tariffs, wars and mounting geopolitical rivalries.
The British operation was profitable as recently as 2022, but made losses of £3m in 2023, mounting to £12m in 2024, according to the Japanese owner, which first invested in the UK arm in 2016.
It blamed competition from Chinese imports as well as the rising cost of raw materials, in financial statements published in last year, which could only be partially passed on to customers in the form of higher prices.
The business also said rising energy prices were putting pressure on operations.
Electric Glass Fiber's closure comes just a day after Energy Secretary Ed Miliband's announced £1bn of investment in offshore wind supply chains.
The investment is aimed at building manufacturing capacity for turbine blades, cables and the platforms needed for floating wind farms.
Britain's manufacturers typically pay far higher bills than competitors in countries including France and Germany, even though much of the Continent has been exposed to higher gas and electricity costs since Russia's invasion of Ukraine in 2022.
British industry had to pay an additional £29bn for its gas and electricity over the last four years compared to the four years before the pandemic, according to new analysis by the Energy and Climate Intelligence Unit (ECIU).
The UK's iron and steel industry alone spent £1.8bn extra in the four years after the crisis. Its energy bill rose 80pc to £4bn, despite steel and steel mill output falling by 25pc since 2020.
The Office for National Statistics has said the UK has some of the world's highest industrial energy prices. High gas prices and green levies such as the climate change levy, renewables obligation and feed-in tariffs have added to energy bills.
British and European authorities sought to protect domestic fibreglass manufacturers from perceived unfair competition from China, imposing 'anti-dumping' tariffs on imports from the world's second-largest economy in 2020.
The measures are set to run until early next year. Most of the company's sales go to European customers.
But the tariffs were not sufficient to preserve the Wigan plant.
NEG said the closure of the site, just west of Manchester, came despite intense efforts to find an alternative. Production will cease later this month.
The parent company said:'NEG has considered various options, including the possibility of selling EGFU, forming strategic partnerships, or cessation of its business activities during the approximately two and a half month strategic review period.
'In order to quickly rebuild our composites business, we have determined to cease EGFU's operation and proceed with preparations for voluntary liquidation.'
The closure comes after Sir Keir Starmer stepped in to rescue British Steel, taking control of the business as the Prime Minister deemed the Scunthorpe site to be critical to the country's industrial security.
In that instance, a Chinese owner's planned closure would have threatened the nation's remaining steel production capacity, with ramifications for industries from construction to defence at a time when the Government wants both of those sectors to ramp up output urgently.
Last night, the industry minister Sarah Jones said: 'We know this is a concerning time for Electric Glass Fiber UK workers and their families, and we are continuing to work closely with Nippon Electric Glass to understand the challenges and provide support.
'I recently met with the company's leadership to stress the importance of the plant to the area and the UK.'
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
