$1bn+ investment at Arrium: ‘Sky is the limit’

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Sanjeev Gupta, whose company bought struggling steel producer Arrium, has met with workers in SA.

Sanjeev Gupta visits the Arrium steelworks in Whyalla. Picture: AAP Image/David Mariuz

BRITISH billionaire Sanjeev Gupta, heralded as the saviour of the Whyalla steelworks, believes the “sky’s the limit” for the plant’s potential and plans to immediately increase production.

Mr Gupta toured the Arrium steelworks on Monday morning, just days after his GFG Alliance group received approval from creditors for its purchase – and 15 months after it was placed into voluntary administration.

He revealed his short-term plan was to invest more than $1 billion into the plant, but the long-term plan would be “far more exciting and far more grand in terms of steel capacity”.

“Potentially, this place has the infrastructure, the port, the layout, the mining, all of it to be a substantial steel plant of several million tonnes,” Mr Gupta said.

He said Arrium’s steel capacity would initially be expanded from 1.2 million tonnes to more than 1.5 million tonnes, but in the future “you could see this becoming a five-to-10-million-tonne plant, who knows”.

Sanjeev Gupta meets with workers at the Arrium steelworks. Picture: Bianca De Marchi

Sanjeev Gupta meets with workers at the Arrium steelworks. Picture: Bianca De MarchiSource:News Corp Australia

“We have the natural resources, so if you can deploy them properly by making the right investment … and given the infrastructure and the commitment of the people, which already exists, there is a lot of potential,” Mr Gupta said.

He said Arrium’s Whyalla workforce would grow, but refused to say how many jobs would be created or reveal Arrium’s sale price, saying only: “I wouldn’t call it a bargain”.

It was unclear whether the plant’s existing workforce would have their full wages reinstated after taking a 10 per cent pay cut last year to help secure the future of the operations.

“All those details will be worked out, their sacrifice was certainly appreciated and instrumental in inspiring us,” Mr Gupta said.

“The uncertainty in terms of the future of this plant is now over.

“We have a lot of work to do together and we have a great future ahead, but we need to work together and make changes because this is not currently a sustainable, world-class plant, it needs to become one.

SA Premier Jay Weatherill has met with workers in Whyalla to discuss the sale of Arrium steelworks.

“It’s not rocket science to work out if you have the raw material here … to ship the raw material to the other ends of the world and they can make steel competitively, we can’t do it here, that doesn’t make sense.”

Mr Gupta said a critical issue to be addressed was the plant’s source of power. He outlined an initial investment in renewable energy, including building electric arc furnaces.

Extensive discussions were also underway with the State Government on how its $50 million contributions towards the steelworks would be used.

He dismissed questions that GFG Alliance would want further grant support from both levels of government, only “guarantees of support” on the company’s investment in Whyalla.

Federal Industry, Innovation and Science Minister Arthur Sinodinos said he was “very gratified” GFG Alliance had invested in Arrium and both governments would work together to “support that investment”.

Sanjeev Gupta visits the Arrium steelworks in Whyalla. Picture: AAP Image/David Mariuz

Sanjeev Gupta visits the Arrium steelworks in Whyalla. Picture: AAP Image/David MariuzSource:AAP

Premier Jay Weatherill last week said he wanted his government’s $50 million contribution to be used for “positive future infrastructure” with renewable energy projects and the steelwork port at the top of his list.

Whyalla mayor Lyn Breuer said Mr Gupta’s visit and the security of Arrium’s sale had provided an “incredible feeling” within the town.

“I actually got emotional looking at the steelworks knowing we have got over it and we’re going to survive,” she said.

“It’s a wonderful feeling for our community.”

Arrium worker Dhaval Engineer joined the company eight months ago during uncertain times because he saw a “positive outcome and the company would survive”.

Sanjeev Gupta, the new buyer of SA’s Arrium steelworks, sets out the company’s vision for radical change in the steel industry

“Arrium will have a great time ahead and we’re excited to work with a steel giant like Sanjeev, it looks like we’ll have a bright future,” he said.

GFG Alliance has signed a binding agreement to buy Arrium, with the deal on track to be completed by the end of August.

It brought an end to 15-months of uncertainty for the 1500 workers in Whyalla and for the wider community after the company was placed in administration because of its inability to refinance rising debts.

Mr Gupta, who has a strong track record of buying distressed steel companies across the UK and turning them around, says it must have been a “gruelling and horrible” time for all those involved.

He says he plans to spend considerable time in Australia working on the Arrium business and a substantial amount of that will be spent in Whyalla.

– with Tim Dornin, AAP

Originally published as $1bn+ investment at Arrium: ‘Sky is the limit’


Source: einnews.com