By Ian Williams
British industrialist Sanjeev Gupta is working on some “grand plans” for Whyalla’s steelworks which could result in a massive expansion over the long term.
Mr Gupta is executive chairman of the GFG Alliance, which has a track record for turning around failing steel producers in the UK – and recently turned his attention to South Australia with a deal to buy steelworks Arrium.
Arrium was placed in voluntary administration last year, and employs an estimated 5,500 people across the state.
The head of GFG Alliance told workers during a tour of the South Australian plant today that the “sky’s the limit” when it comes to the site’s potential.
He revealed plans to invest well over $1 billion in the steelworks in the short-to-medium term as his company works to transform the steelworks into a sustainable world-class operation.
Over time this could result in a five to 10-fold increase in capacity.
“We have developed a comprehensive plan that we are confident will secure a long-term future for this operation and the community who depend on it,” he says.
“That includes reducing the cost of iron ore feed, modernisation of key equipment, the installation of clean and cost-effective energy generation capacity, expanding production and creating downstream manufacturing opportunities.
“We are also eager to boost export markets for Arrium products and to capitalise on new links between our Australian steelmaking operations and our rolling mills in the UK.”
GFG Alliance’s decision to buy Arrium businesses out of administration is expected to be completed by the end of August after being given the green light by the Foreign Investment Review Board and the Arrium creditors committee.
The takeover is a major vote of confidence in the Whyalla plant and its 1,500 workers.
Mr Gupta praised the ‘patience and resilience’ of the workforce and management during the period of the administration.
“In the midst of all of this uncertainty, the people in the front line at Arrium stuck firmly to their jobs and that is what has given us this opportunity to build a better future for the business,” he says.
Mr Gupta and a senior GFG team spent several hours in Whyalla discussing strategies for the future of the business.
GFG Alliance has a strong environmental focus with a “Greensteel” business model that uses locally-sourced scrap metal in steelmaking and powers furnaces with renewable energy.
Mr Gupta says the Arrium businesses fit very well into his company’s Greensteel vision for an integrated value-added global network based on low carbon, sustainable production methods.
The acquisition builds on GFG Alliance’s track record of acquisitions and turnarounds in the UK where it is now a key player in the metals, engineering and energy sectors.
Photo source: GFG Alliance