SEVERFIELD-Rowen is expanding its operations in India while warning the recovery in the UK construction sector remains “distant”.

The structural steel business, which has its headquarters in Thirsk, said in an interim management statement for the period from January 1 to May 18 that demand in the UK remained at relatively low levels, with little prospect of improvement in 2011.

It announced plans to invest in its JSW Severfield Structures Ltd (JSSL) joint venture in India, which has a growing order book of £36 million.

Tom Haughey, chief executive, said the UK remained the business’s heartland. “However, UK demand and prospects remain somewhat subdued. When we look at India we’re seeing almost ten per cent growth in GDP and probably higher growth in construction potential.”

He said the company also had a bigger market than that to work on, as currently most construction projects in India use concrete rather than steel.

The company announced it would be increasing production at the Indian plant from an eight-hour daily shift to producing 24 hours a day, which Mr Haughey expected to generate annual income of £50 million.

“The next step to increase that is to physically invest more in new capacity, and that’s what we will be looking at hopefully before the end of this year,” he said. He said the business, which employs about 1,179 people, including about 400 in North Yorkshire, retained its strong position in the UK, with a healthy workload in place for each of its four operating plants until at least September.

Mr Haughey said with £221 million of orders, the business was “in a good position” to achieve its annual turnover of £300 million.

He said: “We are continuously booking orders every week. We are still happy with that level of order activity.

“But we’re very vigilant and we’re not happy with the conditions of the market. But we’re competing very strongly for most of the availability out there and we have the competitive advantage to enable us to compete successfully.”