Sunday, June 13, 2021
Home Top Stories GFG Alliance is keen on acquiring more stressed assets from India: Sanjeev...

GFG Alliance is keen on acquiring more stressed assets from India: Sanjeev Gupta

Kolkata | Mumbai: The Gupta Family Group Alliance, led by UK-based Sanjeev Gupta, is keen on investing and acquiring more stressed assets in the metals and mining space in India. The group entered the country earlier this year, acquiring bankrupt steelmakers Adhunik Metaliks and Zion Steel for Rs 425 crore in cash.

“Over the next 6-12 months, there will be quite a lot of consolidation happening in the steel and mining sectors. We will be keenly reviewing options on how and what role we can play,” group executive chairman Gupta told ET over the phone from the UK. “In India, we have several assets which still need to be resolved; we will be examining those.”

Liberty Steel Group, a GFG Alliance company that acquired the local steelmakers, plans to integrate the operations of the companies in the quarter starting October this year. It is focusing on investments in electric arc furnaces and direct reduced iron facilities. It is easier to control production in electric arc furnaces, which are also seen as less polluting.

“In every country including India our focus is on green steel. We will never invest in blast furnaces,” Gupta said. “As far as investments, we have attained a saturation in China, but we will be investing largely in the UK, US, Australia and India.”

Adhunik’s plant is located in Odisha. It has a coal-fired blast furnace (BFs) and an electric arc furnace (EAF), with a capacity of 500,000 tonnes a year of crude steel. Zion Steel is a rolling mill with a capacity of 400,000 tonnes a year. Gupta plans to take the overall capacity to at least 2 million tonnes starting 2022.

Its UK plant at Rotherham, acquired from Tata Steel, will also be doubling production through investments in the current quarter, Gupta said, even as he predicted a short-term drop in demand.

“We see a 20-30% drop in UK steel demand over the next year to year and a half … The issue is, we can’t reduce production in blast furnaces, so that’s why we have focused our investments on converting the BFs to EAFs,” he said.

Shutting down or idling a blast furnace is least preferred by steelmakers as it takes six months to revive production, unlike an EAF unit which can be switched on and off depending on demand.

The Covid-19 outbreak and its impact on demand have therefore placed EAF steelmakers at a distinct advantage. However, the cost of electricity in some countries can be an impediment to EAF steelmaking.

Liberty is moving towards generating captive power from waste and is working on bringing some innovations in product mix at Rotherham Electric Arc Furnaces and downstream mills where it plans to double output to more than 1 million tonnes.

The company aims to become carbon neutral in 10 years and the Covid-19 pandemic has only accelerated the process, Gupta added.

Its steelmaking capacity at present is 18 million tonnes and the plants are now running at 60-70% capacity because of weak demand. Gupta said any positive development on finding a remedy to the pandemic would help boost demand.

“From the time the vaccine is found, within 8-9 months we can see a revival in steel demand,” he said.

“Our biggest sector for consumption is construction and it is least impacted. We just expect some drop in housing in most countries. Reduction in overall steel demand will be around 20-30%,” Gupta said.

The company expects demand contraction for the next two-three years from the automotive sector. It plans to offset that through construction orders secured in the UK and Australia.


Please enter your comment!
Please enter your name here

Most Popular

Indian Staffing Market will be the largest market in the world, today the industry is an over 6 billion dollar industry, says Mr Sultan...

Mumbai: According to Mr Sultan Khan, Founder & Director of EaseConnect HR Services Pvt. Ltd. Indian Staffing Market will be the largest market in...

HSE Interview Questions & Answers

What is Safety? The condition of being protected from or unlikely to cause danger, risk, or injury is Called Safety. What is the accident? It is an...

Putham Pudhu Kaalai trailer: Five Tamil filmmakers bring five stories of love in the time of Covid-19

The trailer of Amazon Prime’s upcoming Tamil film Putham Pudhu Kaalai was unveiled on Monday by filmmaker Mani Ratnam and composer A.R Rahman. Tamil...