In September 2018, the ABC’s hit documentary series Australian Story tracked ...
Welcome to our brand new podcast! This first edition has important news about how you and the business are currently affected by coronavirus.
Sanjeev talks about the changes within LIBERTY Steel Group and answers questions from colleagues around the world.
JUSTINE GREEN: Hello and welcome to ‘Spoken’, a brand-new podcast for GFG Alliance colleagues across the world. I’m Justine Green and inevitably the subject of our first episode is coronavirus and how it affects you and the business.
Later, we’ll be hearing directly from you with your questions. And in accordance with the rules about social distancing and staying at home where possible, our conversation is taking place remotely.
So I’m pleased to say that on the line is Sanjeev Gupta, Executive Chairman of the GFG Alliance. Hello Sanjeev, how are you?
SANJEEV GUPTA: Hi Justine. Hello. Not too bad.
JUSTINE: Welcome to the podcast. Sanjeev, let’s begin by asking, why have you launched this new podcast as a means of communicating with your colleagues?
SANJEEV: Well, for me it’s now 3 weeks where I am isolating at my house in Wales. You know it’s a different world for all of us. So I think obviously we are used to communicating all through our life in particular ways, in particular by being in close proximity to each other in reasonable frequency.
That’s now denied. So it’s time to look at new ways of staying in touch and making sure everybody is connected.
JUSTINE: Before we talk about the wider picture, what is it like in the Gupta household? How are you and your family adjusting to the challenges of a different way of working?
SANJEEV: Well put it this way, I have never spent 3 weeks in a row at home with my family in my life, in history. So it’s definitely a new experience.
JUSTINE: (laugh) Now, GFG is an international group of businesses, can you sum up how the Alliance is being impacted by the pandemic?
SANJEEV: The first point about this is that we are a people’s business. We have over 35,000 people globally. So our biggest concern is to look at our 35,000 population and see how and what best we can do to safeguard them and to do everything possible to balance, you know, continue to work, but first and foremost, putting people’s safety and how it impacts their personal lives for them.
The second point is, once we have done the best we can to protect health and safety, then the second issue is how do we ensure and protect people’s livelihoods and sustainability of the business.
All our operations are impacted globally, each and every one. Some much more, some less. In general, basically, the impact comes from two directions. One is where we are inhibited from production, whether it is because of the virus itself or by government rules. So this is one level of interruption or impact.
The other is from demand. Demand obviously in all countries which are impacted is dropping sharply. So these are the two bookends and different plants are affected in different ways.
In some plants, operations are impacted where we still have demand but are not able to meet it. In others, demand is growing.
JUSTINE: Have you heard from colleagues about their own challenges and how they’re coping?
SANJEEV: As a result of this, as everybody is more or less confined to their homes, we have many more videoconferences and conversations and so on. So in a way you communicate more than you used to, and you get to hear of everybody’s experiences. You have more time to listen to how it is impacting people and so on.
And it is dramatic in some cases, people are stuck in close quarters where, and they’re not allowed to get out or can’t get out when they want to. And it’s quite difficult to sort of be stuck at home all day.
Some are privileged and lucky to have gardens and so on, so it’s a little bit easier. Everybody’s going through their own challenge in their own ways. Some people more, some people less. Some people in one way, others in other ways.
JUSTINE: And of course in times like this, good reliable information is vital. Where can colleagues go to get advice, and what support is available if they need it?
SANJEEV: So throughout the group our HR teams are very busy staying in touch, giving constant advice, updates, as it happens. Things are changing rapidly, of course. So the first point of contact is obviously your local HR teams, and your local leads, your line leads.
And your local HR teams will be fully briefed. They know everything as it happens, and as it gets updated, so that’s the first point of contact.
But you know, GFG is a very open organisation, so everybody has access, people have access to me. People have access to their own local leadership teams as well. So there’s no shortage of people willing to help and provide advice.
JUSTINE: And are people helping each other?
SANJEEV: Yes, it’s amazing. It really is, quite amazing. This feeling of, in moments of crisis or periods of crisis like this, true togetherness or brotherhood or true feeling of being a part of a structure and organization, a family, it really comes out. People want to help. People want to basically facilitate things for each other. It’s very rewarding and very encouraging to see that level of individual interaction.
JUSTINE: Okay thanks Sanjeev and our conversation continues next.
This is ‘Spoken’ the new podcast from GFG and I’m Justine Greene. Away from coronavirus for a moment Sanjeev – I understand you’ve recently introduced changes to the Liberty Steel Group, what’s prompted these?
SANJEEV: We have had in the making since last year, when we decided and announced that our steel businesses globally, which up till now had been separately managed, held, they are all separate investments. They are only united through the brand, but actually they’re all separate companies, and separate enterprises all across the world. Many, many, in every continent.
So therefore we announced a change in strategy that we would unify all these businesses into one single global corporate with full governance in terms of board, auditor, consolidation, publishing reports.
So basically what you would expect from a large corporate, large public company. We will practice all those things. We’ll do a global consolidation, present one single financial picture of the entire steel business.
This was done because although the previous model of having small ring-fenced operations, agile local has been very successful and is, I would say, one of the secrets to our success. But the size which we’ve come to acquire, that we probably more transparent, and also we were able to yield the weight of the whole organisation and the force of the whole organization as one large company.
We are one of the largest global producers of steel now and we wanted to achieve that. That journey was on its way, it was actually scheduled to be completed a little bit later in June. But given the events which have now taken things, we decided that we would stick to, our traditional year ended March. So we decided to stick to March as our year-end. So the merger has happened as of 31st March. The auditors have been chosen; the board has been appointed. All of this is being announced.
We will be able to present this picture to the world much earlier than I had originally budgeted. And one of the reasons why we have done it early now is because we want to present a picture of what Liberty Steel Group looks like pre-date back to COVID.
JUSTINE: And can you give us any of those details now of what it’s going to look like?
SANJEEV: Well, it’s going to look good. It’s been, the last period has been some of the operations have had some challenges, but overall the business has been very successful. Many of its operations are world-class and doing extremely well. So that is a picture we will hopefully be able to present in the short future in terms of its profitability and so on.
Apart from the profitability and financial, which is obviously key, the other point is about the new corporate strategy in terms of management. We have a board of directors. We will have a global auditor, one of the top firms and this audit will take place 31st of March, so it’s already well on its way as you can imagine. And we are racing to try and see how quickly we can publish these consolidated global financials.
JUSTINE: Well, whether in Liberty Steel Group or in other parts of the business, you have front line colleagues with the kind of jobs that can’t be done at home. So how can you reassure them that’s it’s safe to come to work under the current restrictions?
SANJEEV: The safety of our people is always our foremost concern. This has been a hurricane, which has taken everybody by surprise. But we will constantly monitor what is advice available to us from health professionals, from governments, from our own research, and we follow that meticulously and often go well beyond that.
So in every operation we have, we have obviously all the usual measures for social distancing and so on, but also in terms of constant cleansing and taking all the steps possible to be taken. It’s being done continuously. We will continue to evolve our learning, and as something becomes apparent, we immediately take steps to make sure we can take advantage of information available.
The evidence of that is in the fact that we have relatively speaking, very few cases in GFG, and I think that’s testament to the fact that all operations globally are really taking this very, very seriously.
It will constantly increase, and I know everybody who has tools in that difficult position of having to go to work while this crisis bears out, is challenged psychologically in making that decision and going to work, but you know, what I can assure every one of our people is that there will be no stone left unturned in terms of making sure their safety is our foremost concern.
JUSTINE: And what can colleagues do to support those measures?
SANJEEV: Well, first and foremost, follow the advice. I know this is a cliché now almost, but it is what it is. If you follow the advice, that advice is coming with a lot of research, governments, specialists. A lot of people are putting a lot of time, money, effort into working out why that’s an appropriate way of tackling this crisis and this virus.
And it’s working in many places. We’ve seen evidence more and more of this working in many countries. So if you follow the advice, we’ll get through it. We’ll get through it in a safe way.
JUSTINE: Now before we take some questions from colleagues, we’re already hearing how some businesses might not survive the crisis. How resilient is GFG in the face of this global disruption?
SANJEEV: So what we do is fundamental to life. Steel is in everything we do. There’s nothing, you can look around me right now and you’ll see. you know, there will be dozens of things which are made where steel has gone into. So modern civilisation cannot do without steel.
This crisis will pass and all the governments, all the peoples of the world, like every other crisis which ever happened, will come behind these people and there will be growth again. And there will be steel required in times to come again.
So fundamentally, our business is essential. While this crisis is unprecedented, even more unprecedented is the support the governments are giving us in terms of helping us get through this. And I believe that once we’re on the other side of this crisis, they will do equally or even more of a push towards spending and building the countries and cities. So infrastructure will definitely be the key focus. Construction and infrastructure will be the key focus for all governments.
And that is core sector for us. And I believe that actually, in a way we’re looking, if I look beyond this crisis and see as we come out of it, our businesses globally will be well positioned to take advantage of the infrastructure boom, which is inevitable in every country in which we are operating.
JUSTINE: So Sanjeev, you’ve talked about steel, what about other parts of the business?
SANJEEV: Two fundamental metal businesses is steel and aluminium, obviously. Aluminium is even again, something which in terms of the future is of critical importance. As the world gets more and more carbon focused in terms of environmental change, aluminium is going to become and is already more and more critical in terms of the new automotive industry, how it is shifting to aluminium. And generally it’s still regarded as a metal of the future.
SANJEEV: So it’s position in terms of the world is very much set to grow. Even in some ways, steel is supposed to capture some of the share that steel has. And we have the best smelter in Europe. It’s got a very strong privileged position. It is a very high quality asset and it has actually done incredibly well through this crisis, despite it being right in the middle of the virus infected areas, its managed to continue operations.
Those people, there’s a lot to be said about how brave they’ve been in terms of so freely working up shift patterns, doing this, doing that, while protecting themselves and each other, they’ve still managed to keep production going.
So both smelters in France and in the UK are both running, and both have taken very extreme measures in terms of making sure they can protect themselves from the virus. And both are doing quite well financially, because their products are in high demand.
JUSTINE: And how are GFG helping directly during the crisis?
SANJEEV: So of course, first and foremost in terms of helping our own people, our communities, providing help where needed in terms of PPE or anything to our local hospitals and so on, many businesses are contributing doing that.
But in terms of our business, its ability to help, actually it’s quite profound, because again, if you think about hospitals or anything, it’s all metal. It’s steel, aluminium and so on. We supply tubes for hospital beds, which go to NHS beds. We supply aluminium, which goes into making oxygen tanks, which again go to NHS. There’s lots of examples of how our various businesses around the world are being able to directly contribute towards this fight against coronavirus.
JUSTINE: Okay thanks Sanjeev. Coming next, we’ll have some questions direct from your colleagues.
Well, an important part of our podcast is the chance for you to speak directly to Sanjeev and other senior leaders. We’ll tell you how to get in touch shortly, but we’ve already had a number of questions, so let’s get straight to our first one.
BARBORA CERNA DVORAKOVA: Hi Sanjeev, this is Barbora Cerna Dvorakova, head of communications from Liberty Ostrava in the Czech Republic. Next year is the 70th anniversary of the Ostrava steelworks. Will we get a birthday present in the form of the launch of construction of the long desired new steelmaking technology? Or may the current crisis mean that the plan will be delayed?
SANJEEV: Hi. Actually it’s a very good question, because what we need to do through this crisis and we are beginning to turn our head to that is while we tackle the war as we face it on a day-to-day basis and as things twist and turn, equally we need to look beyond this crisis.
So, for sure one of the key things we’re going to do is look at our capital plans, our technology plans, our transformation plans in each business. And in Liberty Ostrava, clearly the shift to hybrid steelmaking facility, which can use both blast furnace iron and also scrap with electricity is a key, key initiative, which is one of the first such plants to be built in Europe. It’s something which we are very excited about. It allows us to move towards our carbon neutral target for 2030. And it’s very well positioned for Ostrava, because Ostrava is right in the middle of Europe where there is plenty of scrap available.
So that project we’re going to expedite for the sure. I was talking actually to your CEO only yesterday. I was saying that we need to really see how we can expedite that project and other capital programmes. So I’m very much hopeful that the Ostrava on its 70th birthday will very proudly celebrate this very important present.
JUSTINE: Okay thanks for that. Now here is our next question.
CHRIS ARCOBELLI: Hi Sanjeev, it’s Chris Arcobelli, Caster Operations Manager from Liberty Primary Steel in Whyalla, South Australia here. There’s been talk within Australia the government and abroad, fast tracking infrastructure projects that could make use of our steel, is there any update on this?
SANJEEV: So again, as I was talking about earlier, construction is one of the key areas of activity, infrastructure, construction where governments can have a direct impact because a lot of the large infrastructure projects are done by governments. And of course Australia is already on a massive, if I remember correctly, it’s over 300 billion over the next few years, on a massive campaign to rebuild the infrastructure required from the growing population and the evolution of the Australian economy.
And I’m very sure that this will get even more, these sails will get much more wind behind them. So all these programmes will be speeded up and the governments will make sure that the construction projects are followed through very quickly.
JUSTINE: And here’s one more question.
TRACY ROYAL: Hi Sanjeev, this is Tracy Royal. I’m the Purchasing Manager for Liberty Steel Georgetown and my question for you today regards the recent acquisition by Bayou Steel Group in Louisiana. What is your vision for collaboration between the recycling steel and wire operations in the United States?
SANJEEV: The US, of course, is the Mecca of green steel. It’s one of the countries where the recycling of steel is the most proficiently used. More than 70% of the US steel is already produced from recycling. We want to have our space in that. We have a stated target of reaching 5 million tonnes of recycled green steel in the US.
The addition of Bayou is a very important step in that journey. Bayou is located in perhaps the cheapest scrap region in the US. We’ve got our own deep seaport. We have got almost the cheapest electricity amongst the cheapest gas availability, so in terms of all the ingredients there is abundant availability of all the raw materials.
And in terms of people there is a great heritage there of making steel, and lots of good people available. So all of this will definitely turn into, turn Bayou into a good source of steel for our operations. So not only will we look at Bayou in terms of making finished products, in terms of section rules they have, but actually the plan is the Bayou will become a source of semis, for many of our operations in the US and abroad.
So yes, the Bayou is certainly a key focus in the business, and it will help other operations in the US as well, because it could be a very competitive source of billets for many of our rolling mills across the country.
JUSTINE: Thanks Sanjeev. Many thanks for those questions, now it’s over to you. If you’d like to ask a question to Sanjeev or another senior leader, just drop us an email to email@example.com, that’s firstname.lastname@example.org.
You can also send us your comments and any ideas you might have for the podcast. So do get in touch, we’d love to hear from you.
Well Sanjeev, it is a worrying and challenging time for everyone, what’s your message for colleagues as we close this podcast?
SANJEEV: First and foremost, what is the most important thing to all of us, is continue to follow the advice, stay safe and keep your colleagues safe. Life goes on. We will come out of this. It may be different to what it was, and I am pretty sure there’s going to be many differences. The world has changed forever. But life goes on. Humankind goes on.
We will continue to evolve, we will continue to grow, and at GFG we have always been at the forefront of change. Change is one of our fundamental values, after all. And hence, we will again, as the world changes, we will be at the forefront of change again and will lead the way in terms of the evolution and the next success story.
JUSTINE: Sanjeev, thanks very much for joining us.
SANJEEV: Thank you, Justine. It was a real pleasure. I’m really excited about this podcast. I think it’s going to become, I’m sure it’s going to be a real hit. I’m looking forward to lots and lots of queries and questions from everybody. Thank you.
JUSTINE: Well, on our next podcast we’ll continue to cover the issues caused by coronavirus and keep you up to date with the latest news and views across the business. Don’t forget you can send us your questions and comments to email@example.com and we look forward to being with you again very soon. From me Justine Greene and Sanjeev Gupta, thanks for listening and goodbye.