SPOKEN – Business Update Five

SPOKEN – Business Update Five

In this edition Sanjeev gives an update on the activities across the GFG Alliance.

This time Sanjeev has an update on the latest business developments including the refinancing process. Also, there’s news of expansion for the GFG Foundation. Plus, we look at the importance of greater mental health awareness.

 

Show Transcript:
TimecodeSpeakerDialogue
00:04CHLOEHello and welcome to ‘Spoken’ – the podcast for GFG Alliance colleagues across the world. I’m Chloe Tilley, and on this episode, we’ll get an update on the latest business developments. Joining us, as always, is Sanjeev Gupta, Executive Chairman of the GFG Alliance, hi Sanjeev, how are you?
00:18SANJEEVHi Chloe, I’m okay, thank you.
00:22CHLOENow Sanjeev, travel has obviously been restricted due to the pandemic, but you’ve now been able to visit part of the business and you’re joining us from Romania. So, tell us a bit about what you’ve been doing there…
00:31SANJEEVIt’s been good, we’ve been going to plants a few times, meeting customers, suppliers, getting to meet the teams again really, and also had several meetings with our existing creditors we’re trying to restructure… Also met new lenders, did a couple of new things. We launched our hydrogen initiative, we also launched the Foundation here, so it’s been a very busy three weeks.
00:52CHLOEJust remind us why you decided to set up the Foundation?
00:56SANJEEVThere are two bookends to that, really, one is, of course, family is very important to us, we consider all our employees as part of our family. And also, local communities in which they operate in. So it’s really trying to see how we can not only look after the business but looks after our family and our larger extended influence around that as well. So it ties to many things. For me personally, the most important is bringing young people into our industry. There is a significant gap in heavy industry, especially steel aluminium. With the advent of what Liberty does, GFG does, in terms of green steel and new technologies and new horizons, the idea is to start bringing the next generation into this and showing them our plants, showing them our plans, inspiring them, trying to basically show them this a good viable option, especially for local communities with local plants. And that has a prospect of it being a good career and starting very early, even at primary school and then going all the way through secondary school, and eventually connecting that up with our initiatives, like university sponsorships and bursaries and so on.
02:01CHLOEAnd so what in particular are you hoping to achieve with the launch of the Foundation in Romania?
02:05SANJEEVSo similarly, it was a launch of the Greensill Academy which we’re going to try and work with local universities, we’ve partnered with them. And we’ll set up – we’re working out how best to set that up. And that’s the key initiative, in Galati in particular, the local university and the local community, to see how we can bring them into the future of the business.
02:26CHLOEAnd it must have been good to get out, to meet colleagues in person again?
02:30SANJEEVIt’s been incredible. Everybody who knows me, knows I’ve always been travelling, I’ve always been to different plants and different countries, I’ve never been used to what happened over the last fifteen months or so, where we were basically constrained quite heavily, but it’s good to really get out now. And I love Romania, so it’s great to be here and spend time here and the weather great, so it’s been incredible.
02:54CHLOEJust give us an insight into what happens when you turn up on site. Is it like a royal visit, is the red carpet rolled out for you?
03:03SANJEEV(laughs) Look, the first thing to remember is, I’m not a stranger. I’m not a boardroom chairman who sits and never sees his plants. I love going to my plants and I go there regularly, I can’t remember how many times I’ve been to Galati, but it’s many, many times. So it’s not such a big deal that I’m there. But, of course, it’s my business, I’m very passionate about it, I love people, I love the plant. So when I’m there, there is a lot of activity. I would visit the plants. I’d normally have visitors as well, I’d be showing the plants somebody or other, doing my stays there. I mean this trip I did, for example, we had some of our creditors who came and visited the plant, which was really good to show them around and to show them how good a business it is and how much what we’re doing, and what difference we’d made to the business and to the plant and to people. So it’s really quite nice to basically, be able to talk about what we do and showcase that to visitors, but it’s also great to just meet workers, meet management, discuss what’s going on. Really normally I do a deep dive when I’m there at a plant on what activities, what’s the plans, where it’s headed and so on. And it’s very fulfilling. So there are no red carpets, it’s a normal course of activity for me. What is unique is I haven’t done it for quite some time because of Covid.
04:20CHLOENow, turning to recent performance across the business. What updates do you have for us on developments?
04:26SANJEEVWell, business, first of all, I’m sure we all know, is defying gravity completely. Markets are at an all-time high, so all-time historic highs in iron ore, in steel, in aluminium also, very high prices. So, both prices and our margins are benefiting from a huge amount of tailwinds at the moment. We don’t think this would disappear quickly, we think there are fundamental shortages in supply which will take time to fill because it’s not easy to bring on new capital or new capacity. There’s a lot of pent up demand, everybody’s been sitting at home for the last year and a half or so and now everybody’s ready to get out and spend. And obviously to build and so on and so forth. And following on these will be, also eventually, the impact of all the government expenditure on infrastructure and fiscal measures which will also come, so we think there is a strong cycle ahead of us, we’re trying our best to take the best advantage of that, all the plants are producing at record levels, Ostrava, Galati, Australia’s doing very well, again record numbers. Also mining with iron operations being so strong, very strong. Tamar has had its best year in forty years in terms of how much coal they produced this year, so even that is doing incredibly well. There are some difficult parts of the business, the UK is, of course, the most obvious one there. So there, we’re working really hard on trying to restart – well the plants are operating, but trying to ramp them up, let’s say, so that the financing facilities are being put in place which are being implemented soon.
05:55CHLOESanjeev, give us some more details if you would on where we are with the refinancing of the business right now?
06:00SANJEEVSo first of all, the restructuring is very important, and how we’re going to move forward also. We had a conference which was important as well, I had several leaders around the world come and join me in Romania, we spent a few days together and really talked about what’s the future, what is the new GFG, what is the new Liberty Alvance SIMEC. What does it really look like, what do we want to do, how do we want to – what do we want to focus on, what’s the new era of, you know, we’ve had a lot of growth in the recent years inorganically, now you know, the view is – what the wins are, let’s say, that we have to really focus on our plants. We have great assets, there is a lot of potential to develop them further and we really have to focus on that. And really have to focus on how we manage governance, for example, there is a lot of work happening on that, there is a huge workstream about really focusing on what does that look like, how do we consolidate everything we have into a very transparent, simple group which can project itself clearly to all stakeholders and how will it be managed in governance and so on. So, a lot of work is going on, on all that sort of restructuring governance, future of the business, lot of thinking and a lot of work. So that’s very important. I wanted to stress that. But equally important of course is to refinance the business and give it sustainable financing. So that’s been a key focus. The first one is Australia, which is basically virtually done, that would be a great achievement, that’s a great business doing extremely well at the moment. The UK is basically probably next on, we have some plans and ideas on how that will land, which are really right now in the mix of being finalised. We’re discussing that obviously with our creditors as well. And then, of course, the big one is our European business, in which there is a lot of interest for, we’ve had a huge amount of interest with various ones. A bit like Australia, we’ve had – because it’s a great business, making really good money and it has a really solid future. So it naturally attracts a lot of good investors. So we need to choose who are the right ones and how do we do them, how do we structure it, what’s the capital structure look like, what is the best for the business, what is the best in terms of getting our creditors repaid. So all of that has been going on at a pace and it will continue, it will continue. I mean, really, most of this year will get consumed by sorting out all of this restructuring and refinancing. Which will then put us in very, very good stead for the future. Especially with these market conditions.
08:09CHLOENow finally for the moment – we’ve talked previously about the changes to decarbonized sources of fuel including hydrogen. And I understand you’ve just launched some new research into the future of energy. Tell us more….
08:20SANJEEVYes, so here in Romania we’ve signed an agreement with various institutions and renowned parties in terms of research and development, and the idea is for us to basically develop hydrogen for Galati. It follows from the agreements we’ve signed last year together with the Prime Minister then and several ministers. Which is basically, the idea is eventually Galati will be based on hydrogen, so we want to take the first steps in terms of developing the production of hydrogen which will progress now, it will come easier in places like Australia where we have an abundance of competitive renewable energy.   Of course, energy, especially renewable energy at the moment in Europe is very expensive so we need to see that come down. But we want to be ready for that. So we’re basically launching these initiatives, the idea being we’ll do some production, we’ll do some pilot plants, we’ll start integrating that into our production and eventually as the price of hydrogen will come down, we will switch from natural gas to hydrogen.
09:16CHLOEOK thanks, Sanjeev and next we’ll get an update on ‘I am Here’.
  (Music)
09:24CHLOESanjeev, we’re all conscious of how challenging the pandemic has been for so many people. And a big part of the response has been a greater emphasis on mental health awareness. Just tell us how are you continuing to support colleagues?
09:38SANJEEVChloe, this is actually a very important topic and something I’m very proud of, of what we’ve been able to do, even despite all the constraints of Covid and especially when it was needed the most, during the difficult Covid period. But I don’t think it ends with Covid, it’s actually something which I think should be a part of our life. So I Am Here which is part of GFG Safe has had great success in a few countries like Australia and UK, but we’re now going to roll it out across all of our businesses around the world, each and every business will have this initiative, and it’ll become – minimum training will become mandatory, so everybody will need to go through it, and it’ll become something which is part of our daily life. I think somebody compared to it having – called it “Mental PPE”, like being in a plant, you have to have PPE to protect yourself, protect your health and protect yourself from injury. Similarly, I Am Here will become part of our lives, part of the system, part of our protective framework which helps us all handle issues which are ever-increasing in modern life.
10:38CHLOESo just remind us how ‘I am Here’ is actually supporting people….
10:42SANJEEVSo Chloe, actually, when you start thinking about it it’s a very simple point. It’s really equipping everybody, all of our people, with some minimum skills and training to really develop an awareness of their own mental health and the mental health of their colleagues in and around them. And with that awareness, being able to then, basically if there is, if they perceive or anticipate an issue, being able to guide themselves or their colleagues towards what help is being provided by the company. And the company has different programs in different plants, specifically suited for each situation.
11:16CHLOESo if somebody is listening in the business now, and they want to find out more about ‘I am Here’, where do they go?
11:22SANJEEVWell, first of all, as I said this programme is going to be rolled out across the world in every plant, every operation. So there will be local announcements, there will be this minimum training which everybody will go through, so in that obviously, you’ll automatically know what the map looks like and where and how to navigate it. But in general, it’s going to be led by HR, so your HR leads, also your line managers, they will all be aware as well, so if there are any questions, maybe questions about when will this happen, how will this happen, what will it mean, all of that you can address with your HR leads.
11:53CHLOEOK well, that’s it for now. But if you’d like to contact us with a question that you’d like to ask Sanjeev, or a comment on the podcast, do get in touch, we’d love to hear from you – all you have to do is send us an email to spoken@gfgalliance.com, that’s spoken@gfgalliance.com
12:10CHLOESanjeev, thanks for joining us and look forward to speaking again very soon on our next podcast.
12:14SANJEEVThank you, Chloe, great talking.
12:16CHLOEDo join us then when we’ll keep you updated with the latest news and views from across the business. Until then, from me Chloe Tilley and Sanjeev Gupta, it’s goodbye.

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SPOKEN – Business Update Five
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