SPOKEN – Episode 8
In this programme Sanjeev gives us an update on some big news for the business in Europe, and he answers questions from colleagues in France and India. We are joined by Arnaud de Weert from the GFG senior leadership team, who reveals how he gets up close to nature. Plus, we’re off on a tour of the Scottish Highlands!

 

 

Show Transcript:
Justine GreeneHello and welcome to Spoken, the podcast for GFG Alliance colleagues across the world.
Justine GreeneI’m Justine Greene and on this episode, we’ve news of potential big developments for the business, plus we’ll meet GFG’s Chief Operating Officer, Business Improvement and CEO of ALVANCE Aluminium Group, Arnaud de Weert, and of course we have questions from you.
Justine GreeneAs always let’s kick things off by chatting with Sanjeev Gupta, Executive Chairman of the GFG Alliance.  Hi Sanjeev, how are you?
Sanjeev GuptaHi Justine.  Very well thank you.
Justine GreeneNow let’s begin with that development news I mentioned. Sanjeev, you recently announced that Liberty Steel Group has made a ‘non-binding indicative offer’ to acquire ThyssenKrupp Steel Europe based in Germany. Talk us through what’s been happening.
Sanjeev Gupta  It’s obviously a long time in the making, so a lot of hard work from a lot of people has gone into this.  It will be a truly transformational transaction, and of course the Group is used to doing transformational transactions.  Every year we have grown substantially and each step we have taken has been a true transformation.
Sanjeev GuptaBut this will be the biggest and the most significant of those yet.  It will create a real European champion with very high quality presence in automotive, packaging, construction and all the relevant steel sectors, where it will spread out geographically from the easternmost part of Europe to all across Germany, France, Belgium, Luxembourg and clearly everywhere all over Europe.
Sanjeev Gupta  But very importantly it will create a lot of synergy between other businesses.  There is a lot of common value in terms of objectives, especially on the GREENSTEEL agenda, but also in terms of asset complementarity between upstream and downstream.  There is a lot of money to be saved and synergies to be had, by combining these 2 businesses.
Sanjeev GuptaIt is of course a long time in the making still.  This is still early days, so we shouldn’t get too excited.  But, it will be a real transformational transaction for sure, if it goes through.
Justine GreeneSo, why have you gone for this acquisition?  What is your thinking?
Sanjeev GuptaThere is need for consolidation in our industry globally, but especially in Europe.  And we have multiple pressures in the industry even before the pandemic in terms of capacity.  And the biggest challenge and the biggest opportunity of all, which is overriding all that is the green transformation or the decarbonisation of our sector.
Sanjeev GuptaWe are very long on downstream, ThyssenKrupp is long on upstream, so by combining the 2 businesses we have better utilisation of assets, we have complementarity in products, complementarity in regions?  So in all other respects also there is a lot of synergy.
Sanjeev GuptaBut the main point is in terms of real macro direction, this will give us an even bigger presence and it will increase our drive and increase our speed and increase the size of the decarbonisation initiative the group wants to undertake.
Justine GreeneSo, how will this impact the Liberty Steel Group?
Sanjeev GuptaIt will impact our European business significantly.  The first thing to say is of course in the short term nothing changes, for the next several months, maybe even longer, nothing changes, because these transactions don’t happen very quickly.
Sanjeev GuptaSo nothing has changed and we should all continue with all our initiatives and business plans as we are doing and keeping everybody, especially in these difficult times, keeping each other safe.
Sanjeev GuptaBut in terms of where it takes us if this transformation happens, it will be, the most significant impact will be on the European business because we will be combining our European business with this group steel.  So that will mean our downstream businesses will be able to access more upstream production from this.
Sanjeev GuptaOur businesses, for example, in Eastern Europe will be able to access some of the automotive and packaging sectors, which we are not currently in there, we will be able to synergise across that.
Sanjeev GuptaAnd in terms of our GREENSTEEL initiatives like our project in Romania, our project in Czech Republic, all of these projects, they will become part of a larger drive for decarbonisation, so they will get more momentum behind them.
Justine GreeneNow, we often talk about CN30 and your ambitions here, what’s the latest update you have for us?
Sanjeev GuptaWe really continue to keep our focus on CN30.  We have appointed, of course, a new leader, Roland Junck, to take that challenge on.  Roland has got incredible experience, and I think second to none in the industry starting as CEO of ArcelorMittal and throughout.
Sanjeev GuptaAnd also has a good passion for this initiative.  So we have made and announced various plans in Romania.  If you remember, we had some weeks ago, a ceremony together with the Prime Minister and many of the ministers, where we brought together all key stakeholders including the government, including EximBank, including Romgaz, the National gas utility.
Sanjeev GuptaThe local University just set up an Academy, the Hydrogen Institution.  So all the key stakeholders, Prime Minister proud and brought together, and we signed agreements with them to launch our 4 million tonne GREENSTEEL project there.
Sanjeev GuptaIn Ostrava, we got approval to issue our tender for the hybrid furnaces, which is now underway, and we will be selecting contractors for that fairly soon.
Sanjeev GuptaIn Australia, our transformation project there got cemented into a proper full-blown GREENSTEEL project, fed by our solar plant to make hydrogen and eventually we’ll make hydrogen steel there, and so on.  All across the group there’s been lots and lots of work planned and definitions.
Sanjeev GuptaSo now we have a roadmap in terms of our existing footprint to basically, how to get to this carbon neutral within the next 10 years.  And based on that roadmap at the moment we are very confident we will achieve that ahead of the red line we have set ourselves.
Justine GreeneFor the moment, thanks Sanjeev, we’ll be back with you later in the podcast for you to answer questions from your colleagues, and for news about The Chairman’s Global Awards. In the meantime, we’ll meet our guest next.
JingleSpoken.
Justine GreeneJoining us on the line now is Arnaud de Weert, Chief Operating Officer, Business Improvement for GFG Alliance and CEO of ALVANCE Aluminium Group. Hello Arnaud.
Arnaud de WeertHi Justine, pleased to meet you.
Justine GreeneAnd you, too. Last time we met V Ashok, and heard about, among other things, his passion for cricket and Bollywood movies. What do you like to do outside of work?
Arnaud de WeertOh, I sail.  It’s a real nice family activity. We have a boat, which we keep in Fort Lauderdale in the US.  We used to live in the US, and we have kept the boat there.  And what happens is every summer we take the family out to one of the island groups in the Bahamas. The kids love fishing, and the kids love being in the sun, and also all kinds of water sports, and it’s really a great nature escape over there.
Justine GreeneYou must see some amazing wildlife?
Arnaud de WeertOh yes, it’s all the usual.  Turtles, sharks, crabs, large fish. And the sharks are very benign, most of them are nurse sharks and the kids actually get comfortable enough to swim with them to the dismay of the parents.
Justine GreeneThat must make you very nervous indeed?
Arnaud de WeertIt does.  It does, because you’re really on your own.  If anything happens, help is very far away, 6 to 8 hours away.  So you’ve really got to be careful and be self-sufficient.
Justine GreeneMy goodness.  So tell us about your two roles at GFG and what they involve?
Arnaud de WeertI do two things, like you said.  I am Chief Operating Officer for business improvement and I run the aluminium verticals, so all the aluminium businesses for the GFG Alliance in the group called ALVANCE, which we started in January of this year, putting all the businesses together.
Arnaud de WeertAnd in my first role I really look at how to optimise the processes for all the businesses in the group, across the globe.  So we look for best practice and we roll that out across all the other businesses.
Justine GreeneYou joined the business last year, give us your thoughts on operational improvements since that time, and what’s next in this area?
Arnaud de WeertI think our real strength is that we have a good base in different areas of different stages of maturity, in different areas, coming from the businesses that we were acquired from.  And what we have as a common platform is, all around the lean manufacturing and the principles of that, which we are rolling out globally, doing improvement events, and a lot of training.
Arnaud de WeertAnd I see we have long runway of continuing on that journey and delivering significantly improved results. We also benchmark electric arc furnaces against each other or blast furnaces against each other and see who performs better and try to find out why.
Justine GreeneAs we mentioned you are CEO for ALVANCE Aluminium Group, what is the focus for this part of the business as we head towards the end of the year and into next?
Arnaud de WeertFor ALVANCE it is really very straightforward. We need to grow.  I always make the joke to Sanjeev saying, that we are the tail that wags the dog.  The dog being the big 18 million tonnes steel business, and we are just 500,000 tonnes, and we need to grow.  So that’s really what our focus is on.
Justine GreeneFinally Arnaud, Be GFG Safe – Life Savers, has recently been launched.  What is it about and why is it important to you?
Arnaud de WeertIt’s very important to me because it is an important part of the Be GFG safe strategy, and it underpins critical incident prevention.  It is really the pillar that underpins that.  And it sets behavioural expectations on each of us.
Arnaud de WeertWhat we are rolling out covers about 80% of the potential critical incidents, and it’s all about reinforcing behaviour, what we want every employee to do so that everyone can return home safe at the end of the working day.
Justine GreeneIndeed.  Arnaud, good to talk to you.  Thanks for joining us.
Arnaud de WeertThank you, Justine.
Justine GreeneNow, on each podcast we like to hear from colleagues across the business. This time, Julia Stoddart, Chief Operating Officer, JAHAMA Highland Estates in Scotland joins us, with first-hand insight into their work.
Julia StoddartHello, everyone.  It is Julia Stoddart here.  I am the Chief Operating Officer of JAHAMA Highland Estates, which is GFG’s landholding in the west of Scotland.
Julia StoddartI’m standing in the rainy, misty foot falls of Ben Nevis, which is the UK’s highest mountain at 1345 metres or nearly 4500 feet.
Julia StoddartThe North face of Ben Nevis is part of the estates, as is much of the surrounding mountain range.  And the estate covers around 140,000 acres of the Scottish Highlands, which is equivalent to roughly 57,000 football pitches.
Julia StoddartSo these days, a well-run Highland estate is really a multi-enterprise rural business.  At JAHAMA we have agriculture. We have forestry, hunting, recreation tourism and much more than that.  And we work alongside our colleagues at ALVANCE and SIMEC to support the production of renewable energy and aluminium.
Julia StoddartWe are the only estates in Scotland to have that strong bond between industry and land management, because the estate was brought together from various private landowners nearly a century ago to secure the water catchment for hydropower generation. And it’s those vast hydro schemes that still power the ALVANCE smelter in Fort William today.
Julia StoddartWe run the estate on the principles of sustainable development.  So, every management decision I take considers the impact on the environment, on our local communities and on our economy. Ideally, we are able to deliver benefits in all 3 of those areas.
Julia StoddartOne of our current projects is peat land restoration.  Now peat is actually the most important terrestrial carbon zinc in the UK.  We have around 14,000 acres of it on the estate. That’s almost the same size as the city of Aberdeen.  Some of the peat is in good condition, but some has become degraded over time, which means it is releasing carbon instead of storing it.
Julia StoddartSo, we block up drains.  We mend areas of erosion and we re-vegetate the damaged peat so that very quickly it begins to heal.  This work contributes to GFG’s CN30 goal and it helps tackle the global climate crisis. And also it naturally moderates the flow of water from the land into the rivers and then into the hydro schemes.
Julia StoddartAs you can probably hear it is raining here today on the estate, which does happen quite often, but that’s a good thing because it feeds readily water into the catchment, which then feeds the hydro stations.
Julia Stoddart It’s a beautiful place to work, and we are very fortunate to be driving forward this ancient landholding to a bright new GFG future. I hope you have enjoyed this window into our world and I’m always here of course, to answer any questions that our colleagues might have.  Thank you for listening.
Justine GreeneThanks very much, Julia, and we will be back with Sanjeev and your questions next.
JingleMusic.
Justine GreeneSanjeev is still here and ready to answer your questions.  I’ll tell you how you can get a question to him in a moment, but in the meantime let’s get our first one.
Balavadra Pani Hello Sanjeev, this is Balavadra Pani from the new LIBERTY Adhunik business in India. Adhunik is your first big acquisition in India, can I please ask you, what are LIBERTY Steel’s future plans for India.  And also, how have, what you describe as, your humble beginnings in India, shaped your approach to business?”
Sanjeev GuptaI mean I was born India, as all of you know. I think the most important impact that comes, if you talk about 3 values, change, family and sustainability, I think the biggest impact is in our family value.  Because from my very, very early childhood as I ran around my grandfather’s steel mills of my father’s engineering plant and so on, this value of treating your employees, your workers, as part of your extended family and caring for them and really having this inclusive system and structure, has been something which was ingrained in me from there and it has served me well.
Sanjeev Gupta When I started my own industrial journey in 2013 when I bought the steel plant in Newport, which was shut down, and I kept on my workers for over 2 years and made arrangements for them, that they would come back to work when the plant restarted.  And in return we paid them half pay and they could go and do other work.
Sanjeev GuptaIn terms of our plans for India, India is undoubtedly the fastest growing market for steel in the world. It is 1.4 billion people, it’s only over hundred million tonnes of steel. And if you compare it to our neighbour in China, it’s a similar population with ten times the consumption. It’s over a billion tonnes of steel produced there.
Sanjeev GuptaSo hence, India it has a huge potential to grow, and we want to be given our origins, we want to be part of that journey.  We have tried to make an entry into India, perhaps a little over ambitiously in the beginning, but nonetheless we have managed to in the end, secure one good jewel which is Adhunik. Adhunik has now started production, which I’m very proud of.  Despite the Covid times, the team has done an incredible job.  And it’s basically in evidence of everybody’s commitment and their passion or their desire to show the world what they can do.
Sanjeev GuptaIt’s similar to my first plant in Newport, we made similar arrangements at Adhunik as well with the workers as well.  The plant was shut before we even owned it.  We will grow the production at Adhunik and we will expand the production at Adhunik to 1 million tonnes and we will look for similar opportunities to grow our presence in India.
Sanjeev GuptaI have said previously publicly that I would like India to be a lease 5 million tonnes within the next 5 years.  I hope we will exceed that, but India will be an important part of our future for sure.
Justine GreeneThank, for that question, Balavadra.  And here’s our next one.
Sebastien CattelainHi Sanjeev, this is Sebastien Cattelain from LIBERTY ASCOVAL in France. The LIBERTY ASCOVAL steel mill is a site at the forefront of GREENSTEEL production, with an electric arc furnace which allows the recycling of scrap metal from the north of France, Belgium and Germany. In this context, how do you intend to make LIBERTY ASCOVAL economically and environmentally sustainable?
Sanjeev GuptaA good point. ASCOVAL is indeed at the forefront of our GREENSTEEL initiatives.  So we have green steel, for us, comes in 2 bookends.  One of them is recycling domestic scrap from countries, which have accumulated a lot of scrap.  And France, Belgium, Germany are certainly countries which have accumulated a lot of scrap, just like the UK over the last hundred years.
Sanjeev GuptaAnd that has all to be recycled.  There is plentiful supply of scrap in France.  France is the highest exporter of scrap per capita after the UK.  And this is where ASCOVAL really benefits.  So we’ll have competitive and plentiful supply of domestic scrap.  This is one.
Sanjeev GuptaThe second is actually France also happens to be one of the lowest cost energy markets in all of Europe.  The electricity costs in France are very competitive.  And also with a very low carbon footprint.  So it really ticks all the boxes in terms of a good GREENSTEEL plant, competitive scrap, low-cost energy with a low carbon footprint, so you can really recycle with a very low carbon footprint.
Sanjeev GuptaAnd on top of that, ASCOVAL is also actually probably the best electric arc furnace plant I have seen in my life in terms of the quality of the plant.  It is a fairly new plant and a very, very good plant.  An excellent plant.  What it has suffered from in the past is lack of volume.  So it was originally designed to make only rounds for seamless tubes, and hence it could not get enough load.
Sanjeev GuptaNow, with the investments which have been made there in the custom modification, we are able to produce blooms, which means we can supply customers like our sister plant, Hayange, with these green blooms which will make green rails, i.e., literally recycled rails, which collect scrap from the French rail network and recycle it and put it back into the system, so it’s a true circular economy.
Sanjeev GuptaSo that gives it a great fundamental core customer and gives it efficiency, because efficiency will come from that volume.  But on top of that if we add other customers from the other parts of the network of GFG then we truly see a plant, which is fully loaded and hence will be very efficient given its ingredients, which are competitive.
Justine GreeneOkay, thanks Sanjeev and thanks Sebastien for your question.  You could be the next person asking Sanjeev a question.  Just drop us an email to spoken@gfgalliance.com.  That’s spoken@gfgalliance.com.
Justine GreeneWell, finally Sanjeev, we’re going to talk about the Chairman’s Global Awards. First tell us what they are and why they are so important to you?
Sanjeev GuptaYou know in life I always believe it is very important to work hard. I have a strong work ethic and I work very, very hard.  I have done all my life.  But I think it is also very important to celebrate.  Celebrate the effort.  Celebrate the success.  Celebrate the excellence.  And so the Chairman’s Excellence Awards is basically exactly designed to do that.
Sanjeev GuptaIt is a derivative of, when I was in Australia, they had safety awards and I said, okay, we’ll expand safety awards.  Obviously, safety is key for us, but we will include that within the Chairman’s Awards and that’s part of the family value awards now.  And hence we took GFGs core values, which are basically, change, family, and sustainability, and also, we took our CN30 objective, which is an overarching strategy for us and an overarching mission now. And we designed these awards and they have been very successful.
Sanjeev GuptaAnd then I wanted to obviously make them global. And we announced that, this year will be the first year where we actually make our awards global.  Then unfortunately Covid came in our way, so we’ve sort of had difficulty in implementing it.  But I’m very happy and very proud that despite this, we are not defeated by this pandemic and we are actually launching our first ever virtual awards where everybody will be invited to, soon it will be announced.  And we’ll come up with a system whereby we are able to do this virtually.  And hopefully in the future when things come back to normal, we can resume doing the physical awards.
Justine GreeneAnd how do colleagues get involved?
Sanjeev GuptaVery soon there will be an announcement, which will outline how to get involved.  How to apply.  How to follow.  How to monitor. How to nominate.  And how the process would work leading up to the awards.
Justine GreeneAs always, great to speak to you again.  Thanks Sanjeev.
Sanjeev GuptaThank you, Justine.  Thank you very much.
Justine GreeneAnd our podcast returns soon with more news, interviews and of course your questions.  Until then, from me Justine Greene, Sanjeev Gupta and o guests, it’s goodbye.
Jingle‘Spoken’ back soon.

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SPOKEN – Episode 8