The collapsed Cardiff steel giant Allied Steel and Wire has been sold to the Spanish group Celsa, raising hopes that steelmaking will again return to the capital.

The news was greeted with celebration in Cardiff, but the controller of the Spanish group has said it is too early to say whether it is viable to reopen the Cardiff plant.

Juan Carlos Orozco, told BBC Radio Wales that it would take three months to decide if the Cardiff plant was profitable, and said an alternative was to transfer the assets, such as the machinery to Spain.

"There are two alternatives, the first one is to restart operations and second one is to move all the assets that belongs to ASW outside the UK and to resell the land," he said.

Steelmaking could be returning to Cardiff

Around 800 workers were made redundant with the collapse of ASW in July last year.

Not only did they lose their jobs but because of a shortfall in their pension's fund, they have also lost their pensions.

Business plan

Mr Orozco said his group would need "at least three months more" working on a business plan "to be sure that restarting operation on the Cardiff site will be profitable."

He said: "The first choice will be to restart operations at Cardiff - but it will depend on market conditions and other variables that we will have to take into account."

He said if production was restarted, it would mean work for "between 400 and 600 people".

Asked about the workforce that might be recruited, he said: "We will negotiate with them terms and conditions that will be in line with the labour market at Cardiff.

"We will be free to recruit whomever we think will be suitable for us.

"Obviously, we will take into account if one person has experience and skills in the steel industry, but it doesn't mean that we will only rehire people who before were workers at ASW.

If production is restarted, he said it would be in May or June 2003."

In their statement on the sale, Richard Hill and Roger Oldfield, joint receivers at KPMG Corporate Recovery said: "We are pleased to have completed this transaction with Celsa Group.

'Committed workforce'

"We understand that, provided market conditions permit, Celsa hope to recommence steel making operations in Cardiff at some stage in the future."

Politicians in Wales have also welcomed the news of the completed sale, first indicated last November.

Welsh Assembly First Minister Rhodri Morgan said, "I am optimistic that if market conditions are right, we will see steel-making beginning again in Cardiff during 2003.

He said the sale meant the company would be "creating good new jobs for the skilled and committed workforce in South Wales."

Michael Leahy, General Secretary of the Iron and Steel Trades Confederation, said : "This is the best news that ex-ASW employees have had for several months."

He added that the number of jobs that will be brought about by the sale are not yet clear.

It's been a roller-coaster over the last six months - the height of stress and despair Worker Chris Keating

"Until we know what Celsa's plans are it would be irresponsible to speculate on how many jobs may be created in Cardiff and what the terms and conditions are."

Immediately news of the sale broke, former ASW worker Chris Keating was overjoyed: "It's excellent news," he said.

Speaking before Mr Orozco's comments were widely known, he said: "It's been a roller-coaster over the last six months - the height of stress and despair."

He said he was concerned that the terms of employment for workers should be good.

"I hope that Celsa recognise the skill base and the skills that's needed for this type of business and that the skills are rewarded in a proper financial manner."

Another ex-worker Phil Jones said after the Celsa statement: "We welcome this latest news that Celsa has now bought ASW

He added: "We hope that former ASW workers are the people who will get the jobs."