SPOKEN – Episode 4

The ongoing impacts of COVID-19, Workforce Solutions, our GREENSTEEL and GREENALUMINIUM ambitions, Jay Hambro’s recent Platts Award and questions from colleagues around the world all feature in this fourth edition of SPOKEN.

TRANSCRIPT

Justine Greene: Hello, and welcome to Spoken. The podcast for GFG Alliance colleagues across the world. I’m Justine Greene and this time we’ll be hearing about how the business is adjusting for post COVID-19 conditions. Dave Scott will join us to talk about Workforce Solutions. We’ll discuss green ambitions with Jay Hambro and Jen Ormsby from SIMEC Mining and Mark Horton from Specialty Steel ask their questions direct to Sanjeev. Let’s catch up now with Sanjeev Gupta, Executive Chairman of the GFG Alliance joining us remotely. Hello again, Sanjeev.

Sanjeev Gupta: Hi, Justine. Nice to hear from you again.

Justine: Nice to be with you again. Sanjeev, we know you’ve been spending a lot more time with your three young children recently. We wondered if any of them are showing a passion for business yet.

Sanjeev: Oh, absolutely. I mean, there is always talk about how, who’s going to take over which part of daddy’s business. So I’m definitely provoking and promoting a competitive spirit amongst them. For me, my work life and my home life is very much intertwined. I don’t really have a big separation. And they are very much part of my work life in the sense that I’m doing this for them and their future generations so I like to get them involved as much as possible.

Justine: Well, definitely ones to watch. Okay. Well, turning to the business then, the pandemic will clearly have long lasting effects on the economy, and all businesses are planning for that. Now you’ve set out plans for 20% to 30% efficiency gains across the company. How would that work in practice?

Sanjeev: Yeah, so I mean, this pandemic is obviously goes without saying, it’s something which has never happened before and I hope to God that it never happens ever again. But what it does mean is that we need to address the crisis which is now, demand globally is down and we think between 20% and 40%, we’re seeing that manifest in different economies and different sectors in different ways. But nonetheless, we’re definitely seeing the one drops and we expect this will continue. We expect this will continue for a prolonged period of time. Not for a short period of time. This recovery will not be quick because until there is a vaccine, I don’t think consumer confidence will return. And in the meantime, we are adjusting all our operations.

So if production is down in all our plants or most of our plants, it means different things in different places. This is cost efficiency drive, whatever you want to call it. In many places it’s simply about just adjusting our production practices, raw material mixes, other things and so on. And there’s no real other shift. But in terms of the office side of things, there is a big change. There’s more work from home, less travel. Do we need the same cost base? Do we need the same resources? Do we need the same offices even? And those sorts of things are being assessed. It means many, many different things in many different places. But the main point is that we are seeking a 30% efficiency drive across all our operations in whichever way or shape it comes

Justine: Inevitably those efficiency gains will mean colleagues jobs and roles will be affected. You’ve had to make some difficult decisions.

Sanjeev: Yes. Justine, this is probably the most difficult thing I’ve ever done in my life. GFG is synonymous as promoting and protecting jobs. But unfortunately, as a result of this, in order for us to get through this and to be fit for purpose, there are some changes required in places where things have changed and changed perhaps even permanently. But what we are doing is trying to do the best we can to do this in the best possible way, trying to look at what other opportunities those colleagues which are impacted may have for a placement in other sides of the business of course, in the market in general. So we’re trying our best to do this in the least impactful way possible to our colleagues. But it is unfortunately something which I had to give in. It was a big hotly debated subject, but eventually given that the situation we’re in is what is unavoidable, that’s what’s happening.

Justine: Let’s meet our first guests now, as we look at how colleagues who might face redundancy could remain in the GFG family. Dave Scott is the general manager of GFG Workforce Solutions. Hello, Dave.

Dave Scott: Hi, Justine.

Justine: Now Dave, just explain first how Workforce Solutions can help colleagues.

Dave: Yeah, sure. In terms of the background to this, the Workforce Solutions has been shaped by a couple of Sanjeev’s key drivers. So retaining skills within our business is key for him as he’s retaining skills within the sectors that we operate and the geographies that we operate in as well. And ally to that is the need to really look after our colleagues as much as we possibly can. So with that in mind, we’ve developed a number of solutions that could be deployed flexibly across our different geographies and across our different business units.

Two of the products, if you like, that we’ve developed have been done in partnership with a company called LHH, they’re a leading global outplacement provider. And the first thing we’ve launched is a redeployment portal. So we’ve got five versions of the portal, a US version, an English version, an Australian, an Italian, and a French version so far. And this is really about making sure that we don’t lose the skills from one part of the business that we’re actually looking to recruit and retain in other parts of the business. So it’s a portal that will help colleagues look for opportunities, be found by other companies within the group and within the different geographies that we operate in, and also prepare themselves for new jobs, new applications, new interviews within the business as well.

Justine: And what can you tell us about your second Portal?

Dave: The second portal we’ve got is an outplacement portal. So, this is really aimed at colleagues who are looking to find work in the external environment. So outside of GFG. And some really world class products to support them in terms of building great CVs, preparing for great interviews, some really good technology to support our employees as much as we can.

Justine: And the third product?

Dave: The third product within the portfolio at the moment is a flexible labor contract. Initially launching that in the UK, we want to give our colleagues that are faced with compulsory redundancy another option to stay within GFG as a genuine and viable alternative.

Justine: And can you give us some examples then of how Workforce Solutions will operate in the UK?

Dave: Yeah, of course. I’m already working really closely with the HR directors and the HR teams and the business unit teams, particularly in Liberty Engineering Group, briefing them on the different products and the processes and the referral processes really that we’re looking to put in place. We’ve already deployed a couple of people from LEG into more corporate roles, which is a great example of moving the skills across the group. The redeployment portal and the redeployment activities will compliment local business unit activities that they’ve already got in place. Rapid response teams, job centres, etc.

So we’ll look to deploy the skills of the flexible labor team into three main areas. So the internal labor market, so supporting the Liberty or GFG businesses in the UK that have their demand for flexible resources. And the external labor market, which we’ll do in partnership with temporary recruitment and employment agencies. And we’ll also work with the GFG Foundation in supporting their activities in the UK, in the voluntary sector.

Justine: So finally, Dave, what’s the process when someone gets in touch with Workforce Solutions.

Dave: So it’s the HR managers and the business unit managers that will decide who needs and who wants and therefore gets access to each of the different products that we have. People and employees who are interested in the flexible labor contract, they’ll also be referred to by the business units as well. And we’ve got briefings, we’ve got FAQs that we’ll deploy and release as the engagements and the consultations continue with our different businesses units.

Justine: Okay, Dave, thanks for joining us. Sanjeev, how do you think Workforce Solutions can flex globally according to different environments across the business?

Sanjeev: I actually think it’s an incredible initiative. I don’t think anybody I know of at least has ever attempted something like this to offer all our blue collar workers a safety net or a promise which says that, look, if the marketplace has changed and there is changes acquired, or if there is productivity drives and all of those things, which have to be done for the businesses to keep prospering and growing and being more than… Winning for the future and winning for the future generations, then those impacted individuals can come into Workforce Solution and they can be retrained, redeployed, and we can work out a flexible workforce which can be basically flexed based on different changes in markets.

Justine: All right, thanks for now, Sanjeev. And we’ll meet our next guest in a moment.

Joining us on the line now is Jay Hambro, President of ALVANCE, CEO of SIMEC Energy and Chief Investment Officer of GFG Alliance. Hello, Jay. I understand your roles have just been acknowledged with an award. Can you tell us more?

Jay Hambro: I can, indeed. I’m very honored Justine, that the Platts team, which is a part of S&P has awarded me the rising star within the commodities and metals sector. I am fortunate to be the Chief Investment Officer for the GFG Alliance. I wear a number of hats on a day to day basis, whether it be the President of ALVANCE, or the CEO of the SIMEC Mining and Energy businesses. I also represent Sanjeev on the board of Wyelands Bank and SIMEC Atlantis, and lead our global M&A and strategic growth teams, which is effectively an internal investment bank that we operate.

Justine: Now, looking at the pandemic, what impact has this had on the way that plants operate and your CN30 goals?

Jay: The pandemic has had some short term effects. I’m very proud that within some of the areas that I oversee, the teams have done a fantastic job. I take Dunkerque, the aluminium smelter as a prime example of that. The management team very prudently took the plant off by 15%. So taking off some of the production. And kept it at that level to allow for any absenteeism that we would have suffered. And we really didn’t suffer any absenteeism. The plant has been brought back to full capacity now. All of our production sites have done a fantastic job at implementing new regime of health and safety.

Now, the advantage of the GFC Alliance is that we started, right from the beginning in terms of our industrial program, with a focus on de-carbonisation, on a focus on GREENSTEEL, which then grew to GREENALUMINIUM and the SIMEC Energy business grew up alongside those two industrial users. So we’re very well placed to fulfill what we’ve always believed is the right feature. And we are very well pleased to work with our broader stakeholders. Whether it’ll be the government or the unions, and our employees, and our financial backers who are now becoming as focused as we are on the de-carbonisation program.

Justine: And in terms of the company’s GREENALUMINIUM ambitions, how will the smelters in France and Scotland help industries like the automotive sector deliver more sustainable products?

Jay: So both Lochaber and Dunkerque are operating two of the most exciting smelters I think in the European Union. Lochaber is the smallest and Dunkerque is the largest, and they are both operating at low carbon. Lochaber is benefiting from a huge amount of rain in Scotland and therefore hydro power, and France provides nuclear power, again, Lochaber and for Dunkerque. So we are able to fulfill the auto industries and indeed the printing and the manufacturing industries demand for a low carbon aluminium product. Which is something that they very much want at the moment.

Justine: Finally, any updates you can share with us about SIMEC Energy’s development plans for the rest of 2020 and beyond.

Jay: We are developing the Glenshero Wind Project, which will provide clean green power to Northern Scotland. It is the largest subsidy free onshore wind farm in the UK at the moment. And we are very much hoping to continue to get positive feedback through the planning process throughout this year, which would allow us to break ground early next year. We are also as a group developing the Cultana Solar Farm in Southern Australia, which is going to be one of the largest solar farms in Australia and we are going to own and operate and build that facility. So it’s an exciting next step for SIMEC Energy. And last but not least, very recently we got positive results from SIMEC Atlantis’ burn tests for the Uskmouth Power Station. So we’re taking an end of life waste product. So a product derived from complete waste that has no other use. So would end up in landfill, and we are using that material to pelletize it and give an extra lease of life to a 1962 power station with a coal substitute.

Justine: Okay, Jay, thanks very much for joining us. Now, Sanjeev from aluminum to steel, and I understand there’s greener plans for Liberty Steel UK. Tell us more.

Sanjeev: So, I think fundamental to this as Jay was explaining as well, is our renewable energy business. That is the foundation on which we build all our green initiatives. So it’s cheaper to recycle compared to making new, because making new steel requires to import iron ore and coal, which is not viable anymore for the UK, because we don’t have any local resources left in the country. So we have local scrap available. So it’s cheaper to do this. But we want to do this using renewable energy. So this allows us to make what we call GREENSTEEL, which is recycled steel using renewable energy. That’s our plan for the UK. UK has an abundance of steel scrap, it has more steel scrap already. Then it needs and it will grow even further. We export eight million tons of scrap and we import seven million tons of steel. So all the steel we import we already make from the scrap which we currently export and this opportunity will keep growing. So that’s a fundamental core of our GREENSTEEL plans for the UK.

Justine: As we talk about the Liberty family, there’s a one year anniversary.

Sanjeev: Yes. Last week we completed one year since we acquired all the assets from Accelor Mittal all seven operations in Europe. It was one of those moments. It was a milestone moment. It catapulted us to becoming one of the largest steel producers in the world. So the last one year has been momentous in many ways. In many good ways, in many difficult ways, but it has been absolutely momentous.

The next year is also going to be same. It’s not an easy year ahead of us. As I was saying, I expect this crisis to stay with us for some time and to continue to challenge us. But equally it gives more and more opportunity for investment as well. Actually, most countries now value local production, local supply chains, and they want to see more and more regionalisation. I keep saying that the era of globalisation is over is now they’re all building local capabilities. So last year was great. We would normally have celebrated in great style. Our usual GFC style. We would have celebrated our first anniversary. It would have been a very proud moment. Of course, given the current situation that we’ve not done. We’re just going to postpone it by a year. So next year, hopefully in second anniversary, we will celebrate it as if it was our first with great pomp and show.

Justine: Okay. Coming next, we’ll end our podcast with some questions from your colleagues.

As always, we like to give you the chance to ask a question. Let’s get our first one for you, Sanjeev.

Jen Ormsby: It’s Jen Ormsby a WHS specialist from our Whyalla SIMEC Mining business. It’s great to see health and wellbeing both at work and in life is one of our four Be GFG safe strategic pillars. Why is mental health and wellbeing important to you and chosen as the first major priority of our new global Be GFG safe initiatives.

Justine: Thanks for that question. Now, Sanjeev, we’ve had to switch you to a different line. What’s your answer to that?

Sanjeev: Really good question and very timely given that we just launched our I Am Here initiative. As the world has become more and more individualistic and work becomes a bit more fragmented issues around this are on the rise, especially under this COVID crisis with people having to work from home, isolated, sometimes not in great conditions, we were very concerned that wellbeing should become an even more important part of our awareness and our initiative. Which is why this I Am Here Program was launched, which is specifically focused on wellbeing. It’s already rolled out in few countries and over time it will roll out across the entire GFG universe. So that is evidence of the fact that this is something which I’m very concerned about, the group is very concerned about and how we care for our people.

Justine: Okay. And here’s another question for you.

Mark Horton: Hi, my name is Mark Horton, I work for Specialty Steels in Rotherham. Where do you see the steel industry in the next two to three years, in particular, [inaudible 00:00:18:07]? Do you think leaving the EU might get back a bit of control to our government in respects of energy and export benefits?

Sanjeev: It’s a really good question. So we will address more and more our domestic market. So while Brexit has been a hit, and I believe it will continue to be a hit, we will start building more and more towards the UK market. And looking at the seven million tons of steel which is imported rather than trying to see what we can export. Well, export are an important part, of course, but I’m saying that our focus really now has shifted much more to the domestic economy. And I do think to answer your last point, I do think that this gives our government more opportunity, for example, to have UK content, or UK steel mandated in our infrastructure products. I’m very hopeful that it will become a mandate rather than recommendation as it is now, which made a huge difference in many countries around the world. We’re doing this, especially in a time like now, where there is all the capacity globally. So to avoid dumped steel coming into our infrastructure from other countries, we have to make sure the UK still is allowed to participate in that.

I think in terms of energy, that is a critical issue, especially for us in terms of GREENSTEEL, because the other key ingredient apart from scrap, which thankfully is available in plenty. So we are doing our own energy projects, of course, to address that. We have our waste energy project in Newport, which will hopefully support a new steel plant in Newport. We have our wind project in Scotland. We have our Biogen units around the country. We have various other initiatives as well.

So we are doing a lot of investments in energy ourselves to bring down our cost of energy, but we will also, of course, welcome anything the government does to help industry in general, by bringing energy prices down, which is a critical ingredient. I believe the future for the industry in the UK is bright. I think the future for steel industry in the UK is bright. It is a long road. It’s not a short… And there will be a lot of difficulties on the way and a lot of challenges, which we have to overcome, but we are in this for the long term.

Justine: Many thanks for those questions. Our podcast is produced for all GFG colleagues across the globe. And we’d love you to get involved. You can ask a question. You might have a comment on the podcast, or perhaps you’d like to see your part of the business being featured. Whatever the reason, do get in touch and take part. Drop us an email to spoken@gfgalliance.com. That’s spoken@gfgalliance.com. Sanjeev, We talked about the economy earlier, what part can GFG play in contributing to a recovery?

Sanjeev: Well, I think we’re already doing exactly that, right? As I was talking earlier, we have accelerated all our investment plans, unlike many other peers in the industry who are sort of pulling back, we’re actually going to just double down on that because we need to make our plants more efficient. And we see a clear opportunity to turn our businesses to GREENSTEEL, which will become a real differentiator in the market. But in doing so, we’re going to basically make these massive investments on all these different countries where we operate, which will generate huge amounts of the local economy and local employment. And obviously that’s been acknowledged by all the leaders who are supporting us wholeheartedly.

The other thing which we’re going to do is soon launch our Academy. Global Academy, which will be focused on training a new workforce. So taking people from schools, universities, technical colleges, and then train them into fit into these new plants which have been built. So new skills for new plants, especially with new technology and so on. So that is, again, I think, a very important initiative how GFG will get into the fabric of life industry society and really drive future growth.

Justine: Okay, Sanjeev. Thanks very much for joining us. We’ll be back soon with more of the latest news from across the GFG business. Until then, from me, Justine Greene, Sanjeev Gupta, and all of our guests, thanks for listening.

Spoken, back soon.

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SPOKEN – Episode 4