- March 2, 2016
- Press Release
Gupta family faces major investment choice following acquisition of Sheerness steel assets
The Gupta Family Group is aiming for further expansion of its fast-growing Liberty Steel business following the purchase of key assets, including a rod and bar mill and electric arc furnace, from the former steelworks based at Sheerness Docks in Kent.
The Group is eager to move the equipment to Newport, South Wales in order to add scrap-melting and rod and bar making facilities to Liberty’s existing hot rolled coil capacity there; creating up to 1,000 direct and potentially 3,000 indirect jobs in the process.
However, executive chairman of the Liberty House Group, Sanjeev Gupta, warned that the current cost of UK energy, and insecurity of supply, could delay the project, and may even force them to move the plant overseas instead.
He said: “Under the terms of our agreement with the sellers, we need to move the plant from its current location by June. Using it to expand Newport is our preferred option, but this is an energy-intensive business so, if the situation regarding future UK energy costs and security of supply doesn’t become clearer by then, we may have to consider moving the equipment outside the country. India and USA are alternative options. Both of these offer healthy market demand, positive government support and energy security.”
The plant from the Sheerness site, which closed in 2012, includes an 800,000-tonne a year mill to make rod and rebar, an advanced 115-tonne capacity electric arc furnace with casters to melt scrap and make semi-finished steel.
The Newport rolling mill which Liberty re-started in October 2015 – saving 150 jobs – is already on course to produce one million tonnes of hot rolled coil a year. The addition of the rod and bar mill from Sheerness would enable it to begin producing a range of long products, including rebar for the construction industry.
As part of a longer-term strategy, Liberty wants to recommence scrap melting operations at Newport so is looking at the option of installing its newly-acquired VAI Fuchs EO EBT electric arc furnace there, along with Fuchs ladle furnaces and a Concast 4 Strand billet caster for casting billets up to 160 x 160mm.
The Gupta Family Group acquired the Sheerness equipment from the Peel Group. Peel Ports, majority-owned by the Peel Group, and Liberty Steel have a strong working relationship and growing partnership in respect of shipping and transportation of steel, using their extensive port operations.
The acquisition of the Sheerness plant is the latest phase in Liberty’s ambitious strategy to create a flexible and fully-integrated steel production and engineering business in the UK.
Liberty Steel is part of the global $6 billion turnover Liberty House Group which trades worldwide in steel and non-ferrous metals. Although the group has steel production facilities overseas, the re-commissioning of the rolling mill at Newport was its first investment in UK production capacity.
Since then it has gone on to acquire most of the former Caparo steel businesses in the West Midlands – saving nearly 1,000 jobs – and it continues to seek further investment opportunities in the sector across the UK.
Mr Gupta said: “We are determined to create a flexible end-to-end steel business that will include everything from the production of liquid steel through to the manufacture and distribution of value-added engineering products for the domestic market.”
He added that the business would also continue to invest in developing renewable energy capacity – particularly tidal power – as part of its wider plan to secure low-cost, clean power sources for steel and other energy-intensive manufacturing operations.
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