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Administrators from PwC have been appointed to parts of Caparo Industries' steel operations.

Unions say cheap steel imports may be responsible for its financial problems.

Reports of 1,800 redundancies are wide of the mark and workers will be paid, according to BBC sources.

The UK steel's sector is under extreme pressure, with Tata Steel expected to announce major job losses on Tuesday and the UK's second-largest steelmaker, SSI, going into liquidation.

PwC has taken over 16 out of 20 units within the group, the accountancy firm said.

SSI's collapse had been associated with the loss of over 2,000 jobs and thousands more indirectly related to steelmaking.

"Employees across these entities of the Caparo Industries group totalling just over 1,700, will be briefed on the impact of administration at the businesses. Staff are attending work as normal and will be paid as normal, so in these respects it is business as usual while the administrators' review gets underway," PwC said.

Matt Hammond, lead administrator and partner at PwC, said: "This is a significant business with a wide range of interests across steel, engineering, vehicles products and technologies. Its scale and reach into significant customers and its importance to suppliers cannot be understated. We will be rapidly assessing all options for the businesses through this week and beyond."

Demand falls

A collapse in steel prices and movements in exchange rates has had an impact on some parts of the Caparo Industries group, said PwC.

"However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support," said the administrators.

"Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business."

TUC general secretary Frances O'Grady said: "One in six UK steelworkers face losing their jobs. At this rate there won't be a British steel industry in a year's time. Ministers cannot afford to stand on the sidelines and watch this crisis unfold. They must step in now with a rescue package."

Caparo was founded in 1968 by Indian-born industrialist Lord Swraj Paul of Marylebone, who remains the chairman.

He came to the UK in 1966 and was made a peer in 1996.