Meet GFG’s Sanjeev Gupta, the white knight of Whyalla
Meet Sanjeev Gupta, Britain’s “man of steel” and the apparent saviour of the South Australian town of Whyalla.
Meet Sanjeev Gupta, Britain’s “man of steel” and the apparent saviour of the South Australian town of Whyalla.
The Punjab-born, British-based scion of India’s wealthy Gupta family has emerged as the champion of the humble steelworker, first across Britain and now in South Australia.
Yesterday’s news that the Gupta family’s GFG Alliance will buy collapsed steelmaker and iron ore miner Arrium was the deal that the company’s 5500-strong workforce has been waiting for. And the record of Mr Gupta’s string of acquisitions across the British steel industry will finally give those South Australian workers cause for excitement about what the future holds after years of pain.
In recent years, amid the headlines about the death of British manufacturing and steelmaking, Mr Gupta has been the industry’s white knight. He has splashed out hundreds of millions snapping up stricken steel mills, forging a reputation for saving and creating jobs in an industry that many thought was poised to disappear.
It started in 2013, when Mr Gupta’s Liberty House Group — part of the GFG Alliance, which includes other Gupta family ventures — bought its first British steel mill in south Wales, where Mr Gupta resides today. That mill was headed for closure at the time of acquisition, and Mr Gupta famously kept the mill’s workforce on half-pay while the mill was overhauled ahead of its formal relaunch in October 2015.
It was a gesture that has built something of an air of mythology around Mr Gupta, and has made him the capitalist poster boy of choice for many trade unions that have traditionally been viewed as hostile towards big business.
In an interview with The Australian earlier this year, Mr Gupta said he was told he was “crazy and completely nuts” for keeping those workers on the payroll until the mill was ready to reopen.
“I don’t make workers redundant, but I am also not a soft touch. It is a business decision,” he said at the time. It was a gesture he said that had translated into a strong respect from his workers: “When I went to restart we did it in record time without any troubles, which is a testament to the workers and the pride they have in their skills.”
Soon after that first deal, Liberty House purchased the British assets of specialty steel group Caparo Industries out of administration, and by March 2016 the company had picked up the mothballed Clydebridge and Dalzell steel mills in Scotland.
Late last year came what was Liberty’s biggest acquisition at the time, when it paid £330m ($560m) for Rio Tinto’s Lochaber aluminium business in Scotland. That acquisition included hydro-electric facilities and 100,000 acres (40,500ha) of Scottish Highlands, making him Britain’s fifth-biggest landowner.
But the financial position of Liberty House and GFG Alliance remain opaque. It is unclear the extent to which the groups have relied on debt to fund their acquisitions.
The British business is profitable, however, with local media reporting that it generated $US410m ($538m) in turnover and $US29m in earnings in the year to the end of March.
The staff numbers jumped from about 1500 a year ago to 4200 at March, and will now more than double again with Arrium’s 5500-strong workforce.
Additional reporting: Jacquelin Magnay
