Galvanising is the main outlet for zinc. It involves coating steel or iron with the metal to prevent corrosion. Until 1997 Britain's hot dip galvanising plants had seen annual growth of over five per cent. But that came to an abrupt halt as infrastructure projects were shelved due to Asia's economic meltdown.

Woolridge said in 1998 Britain galvanised 7,70,000 tonnes, down on 1997, and the figures for the first five months of 1999 showed a decline of four per cent. But he saw encouraging signs in June as orders picked up. "We anticipate some recovery in the second half of this year," Jeremy Woolridge said.

Most of his customers' saleswere in the Middle East, the Far East and the United States. The recovery in world oil prices had helped the Middle East market, Asia was seeing some recovery and the United States continued strong, he said.

Wedge Holdings has 2,00,000 tonnes of galvanising capacity at its 17 UK plants and holds equity interests in Europe's two other main markets, Germany and Italy. In Germany it has a 24.5 per cent stake in Siegener Verzinkerei Holding GmbH and in Italy it controls 38 per cent of Galvan SpA, one of the largest galvanisers in Milan.

Data from the European General Galvanisers Association show that galvanising in Europe increased to 5.42 million tonnes in 1998 from 5.2 million in 1997, with Italy showing the most dynamic growth. Germany galvanised 1.4 million tonnes in 1998, the same as in 1997, while the Italian total rose to 951,000 tonnes from about 800,000. Spain reported a rise of 11 percent to 350,000 tonnes and Sweden a nine percent increase to 130,000 in 1998.

About 30 per cent of Wedge's cost waszinc. On Friday the benchmark London Metal Exchange (LME) three months zinc price was at $1,033 a tonne.