Sanjeev Gupta says plans to transform Whyalla steelworks are ahead of schedule, break even expected this year

British billionaire Sanjeev Gupta says plans to transform the steelworks are running ahead of schedule and he expects it to begin breaking even by the middle of the year.

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British billionaire and mooted Whyalla saviour Sanjeev Gupta says his transformation plans for the steelworks are running ahead of schedule and he expects the formerly troubled plant to begin breaking even by the middle of the year.

Speaking to The Advertiser after complaints that contractors were being paid late and speculation about the financial health of the steelworks, Mr Gupta said “noise” about the business was being taken out of context.

Sanjeev Gupta, head of the GFG Alliance. Picture: AFP

Mr Gupta bought the steelworks in 2017 after owner Arrium was forced into a n administration process brought on by debt.

Mr Gupta said the plant was now losing only a third of what it was previously, and there was a plan for that deficit to be eliminated by June.

“It’s progressing every month and we expect, by the end of the financial year, that it will be on an even keel,” Mr Gupta said.

“That would be an amazing performance for that business given that it’s always had its challenges, having been under-invested in and the plant is outdated. We’re doing better than we expected.

“I’m happy with the progress. It’s a tough business that is losing money, but it’s on a good track.”

Mr Gupta in December held a “big reveal” at Whyalla to detail transformation plans for the site and broader town, which was attended by state and federal political leaders.

Mr Gupta said he was always clear that the project “will take a while” and be “a long-term journey”.

He said the business would be “very profitable” once an upgrade of the existing plant was completed and production capacity increased by about 50 per cent, a process that could take about three years.

The broader business unit, which includes the Whyalla steelworks, is slated for $300 million in earnings this year, amid strong results for linked iron ore and coal mines.

Mr Gupta said new management was rolling out dozens of separate initiatives in a bid to strengthen the steelworks.

That includes “flexing” operation of the furnace in response to market prices, which includes a recent turndown of between 5 to 7 per cent.

“We’ve turned down the furnace because it’s profitable to do so, not because the business has any issues,” he said.

“We’ve turned into a smart model which switches quickly between whatever market is best.”

Small Business Ombudsman Kate Carnell last week lashed Mr Gupta’s company over late payments to suppliers, saying one had waited more than 120 days.