Sanjeev gives an update on the refinancing activities…

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

Sanjeev has an update on the latest refinancing news affecting Australia and the UK. Plus, a look at performance across the rest of the group including Europe and the U.S. Also, we meet LIBERTY Steel’s Chief Transformation Officer, Jeff Kabel. And hear from some of the Chairman’s Global Excellence Awards winners.16 mins

Show Transcript:
TIMECODENAMEDialogue
00:00JINgle‘Spoken’ from GFG Alliance.
00:04CHLOEHello and welcome to Spoken hello and welcome to Spoken, the podcast for GFG Alliance colleagues across the world. I’m Chloe Tilley and on this episode will get an update on the latest refinancing news, plus will meet Liberty’s Chief Transformation Officer Jeff Kabel. Joining us as always is Sanjeev Gupta, Executive Chairman of the GFG Alliance. hi Sanjeev, how are you?
00:23SANJEEVHi Chloe, nice to hear from you again.
00:24CHLOEGood to hear from you. Sanjeev, you’ve recently made a big refinancing announcement regarding Australia. Give us the update?
00:33SANJEEVIt’s an important milestone, as always in these situations the first one is quite a lot of work to get done, so I’m very happy that we have now that behind us. It definitely does give us win behind ourselves momentum to basically continue to pursue all the other refinancing and get them down 1 by 1.
00:52CHLOEAnd so, what is the message for the team in Australia?
00:54SANJEEVAs you know, the refinancing was primarily of the Whyalla business also included Tahmoor but what they have gone through overtime has been incredible, so their support blows me away every time and this time as well I had enormous immense support from the team both the management team the workers unions and the stakeholders politicians whoever was involved I had a great deal of support from. Given that Whyalla was once in a very precarious position, is really is quite amazing to see it now performing on all cylinders. It truly has turned and it’s a great business going forward now with proper sustainable financing behind it as well, there’s nothing holding it back and so it’s really, really great. I know they are all excited and looking forward to the future, I am as well I’m looking forward to getting there personally as well.
01:43chloeOk, let’s turn to the UK, there is also funding news as well. How in particular is this going to affect Rotherham and Stocksbridge?
01:50sanjeevYes, so UK of course it’s no secret, it is our biggest challenge out of all our turnaround efforts. But we are fully committed to it, so this step which basically sees this commit some funds from the group from the shareholder to the restart of Rotherham and Stocksbridge is an important step, because we needed to restart them. Markets are good, there are some challenges which I can talk about, but markets are good, so needed to restart them to prove their viability again to get keep going on our restructuring efforts there and then really sort of positioning it if you like for the big restructuring of the day which is on an extra challenge.
02:22CHLOESanjeev you mentioned the UK has some challenges, consumers in the UK will know that gas prices are going up, but what effect does that have on the businesses for you?
02:35SANJEEVEssentially, basically, we’re in the business of energy, if you look at steel aluminium, they are essentially energy converters. So, energy is our greatest raw material in terms of input, and the impact on energy prices has been profound. It has definitely impacted viability of businesses at least in the short term. It impacts us for sure, there’s no denying that. We have strategies in place, we’re mitigating, we’re changing product mix, some products which because of the energy prices are not viable at the moment. We’re shifting our focus to others, which are, so as often agility is key to our business ,and we have always prided ourselves as being a very agile group so we will manage. Markets still strong, so we will manage but it’s definitely a challenge are we looking forward to that situation stabilising and energy prices getting back to some form of normality.
03:24CHLOESo, if you look to the future, how do you see that for the UK business?
03:29SANJEEVOur core business, what we call our core business which is our Greensteel business which is electric arc furnaces at Rotherham, they are producing at a much higher capacity than they ever produced before and feeding our downstream rolling mills across the country. That’s what we really want to focus on, I believe very strongly that has solid future, UK’s one of the biggest per capita exporter of scrap, and also one of the biggest per capita importer of steel in the world so it has a clear resource which its shipping out and steel which is bringing back, so that gives us a really well positioned opportunity. Especially now that decarbonised steel is become much more important, I mean it’s been our core for a very long time. Most specifically, in terms of other businesses like Stocksbridge which is the superalloys business is a great business, but probably not core to our expertise, so that I see as hopefully getting into some hands eventually, when we’re able to sell it, which will give it a proper sustainable future as well.
04:26CHLOELet’s look at the performance across the rest of GFG. What updates have you got for us, in Europe?
04:29SANJEEVEurope is doing incredibly well, so you know those assets are amazing anyway, there good countries growth markets, low cost and all the transformation efforts are teams made during the tough periods COVID and also pre COVID, are now really paying dividends. We’re really achieving results well beyond our peers in most cases. Both Romania and Czech had their best quarter for a very long time. On our quarter ending June, Romania best since 2008, Czech best since 2011, so those are incredible feats and something we need to keep harnessing. There are investments we made and we need to decarbonise, so that’s all that sort of programme is ahead of us. But at the moment, they are doing incredibly well.
05:08CHLOEAnd what about businesses in the US?
05:10SANJEEVThe US has got an incredible amount of potential, I often compared to InfraBuild, when we bought InfraBuild it was an underperforming business. It has various very strong positioning, again based on local scrap in local market, similar to the US businesses locals scrap, local market. It’s done incredibly well, especially over the last 2-3 years, when things were tough and it continues to do better and better, but it’s got a great way to go, a long way to go and I would see it do better and better.
05:35CHLOEAnd while we’re talking about the US, there could be further infrastructure spending there?
05:42SANJEEVAbsolutely. This is, not just US of course, on the US you have a trillion dollar Infra Bill, which is supposed to get through, which would be enormous and will be enormous for our business, because our business, basically they are much like InfraBuild Australia again is very much based on local construction, local infrastructure spending and so on. So, we’re looking forward to that demand. But this is a global phenomenon, every market in the world we will see large expenditure coming from governments on infrastructure and our businesses are largely positioned for that.
06:06CHLOEOK that’s for that Sanjeev, we’ll be back with you shortly and we’ll meet our guest, next.
06:12MUSICSpoken
06:14CHLOEJoining us now from London is LIBERTY Steel’s Chief Transformation Officer, Jeff Kabel. Jeff, as we’ve been hearing it’s a busy time in your relatively new role, and we’ll speak about that in moment. But, when you have time away from work, what do you get up to?
06:27JEFFWell, multiple things. I actually volunteer quite a bit; I’m a churchwarden of an Anglican church large parish in central London, which takes quite a bit of my time outside of business. I chaired until recently the alumni clubs for my university in the UK. I tried to keep in touch with my five brothers and sisters and mother and aunts back in America, considering the time zone. I like to exercise and see friends when the time allots.
06:59CHLOEOK, now you’re a member of LIBERTY’s Restructuring and Transformation Committee – what does your role as Chief Transformation Officer entail?
07:07JEFFMy role is to effectively work with the various regions to make sure that their business planning is up to date, as far as communicating with any sort of analysis is taking place, either internally or externally. But I’m mostly focused on the UK right now, and so it started with helping the local executive team prepare a business plan, looking five years forward. We have also worked with two outside consulting groups, one with the local trade unions and one with our creditors to validate those business plans, as well as interfacing with all the key stakeholders. So, it’s the employees, it’s the unions as I mentioned, it’s local and national governments, as well as speaking with the creditors. So, it’s trying to keep everyone informed as to the process of the restructuring that we’re going through and also nudging the teams in order to look forward to implementing these business plans in the near future.
08:14CHLOEAnd prior to joining LIBERTY, the metals and energy industries come as no stranger to you….
08:19JEFFNo, no, I mean it’s going way back I was involved with the original programme to trade emissions credits in America, which was to combat acid rain. And then, that got me more into the natural gas and electricity trading. I ran a business down in the Argentine, we had power assets and gas assets. And then, when I came to the UK almost 20 years ago, I decided to go into the metals business and so I’ve been focused on steel, created many of the forward markets you see now on exchanges and in Chicago, in London and in Singapore for hedging out the prices of steel and iron ore. And I also served three years as a the chairman of a large steel trade association, so I’ve got quite a bit of knowledge on the government policy, the trade policy that has been quite shall we say stepped up in the last four or five years around the physical movement of various products.
09:20CHLOEJeff, steel prices are buoyant to say the least. What’s your assessment of the markets for the rest of the year?
09:26JEFFWell, it’s interesting, because we started seeing a bit of softening, which tends to happen at this time of the year, but with the recent surge in energy prices, not just in the UK but in the continent and many parts of the world, it’s put some support under the cost side. Iron ore prices have come back up again as well as scrap prices and you’re seeing some mills cut back on production because of that. So, the overall picture I think is quite buoyant as you say, right through I’d stay till through the middle of next year, as far as prices staying where they are. probably going up because of those factors that I just mentioned.
10:07CHLOEAnd we heard Sanjeev talking about refinancing of the UK business. What are you focussing on now to continue the restructuring of LIBERTY Steel in the UK?
10:18JEFFThe primary focus right now is to create a sustainable business. As I mentioned, we have a five year business plan, we have a seven month business plan and it’s the execution of that.  We are also in the process of restructuring the long term debt, and taking avail of the opportunity for LIBERTY to be at the forefront of the UK, as far as being world beater in low carbon steel making.  Product’s support the industry locally and support the government’s goal too as I say pursue a green agenda. We obviously.. our plants are well positioned in the UK, i.e. green steel being electric arc furnace is probably the best positions in the UK to do that, and so we are charging ahead to be able to meet that goal obviously internally but also to assist the UK government in its goals going forward.
11:12CHLOEJeff, all the best in your role and thanks very much for joining us….
11:16JEFFThank you, hope to speak to you again very soon.
11:18CHLOENext, we’ll be back with Sanjeev.
 MUSIC 
11:20CHLOESanjeev, recently you and I got together ‘virtually’ for the first ‘Chairman’s Global Excellence Awards’. You announced the winners as part of that special broadcast. You must have been absolutely delighted with the high quality of all the nominations…
11:37SANJEEVWasn’t that amazing, Chloe, I mean especially at the end of what has been a tough period tor most people, to see the amount of enthusiasm input that was generated across the world, and all the submissions and the quality of them and the way the event was organised.  I mean, everything in every respect it was it was a credit to everybody at GFG and I’m really looking forward to the visuals I think although I would be very keen to get back together with people and some of these things to start being real and less virtual again, by I think I have a feeling that there will be a virtual element to things we do more in the future, so it will be interesting to see how this impacts the future.
12:13CHLOEWell, let’s hear from some of the winners…
12:14SEANHi I’m Sean Ahearn, from InfraBuild Australia. I was extremely surprised and it means the world to me for the fact that my work is being recognised by my peers and it’s given more backing to the programme that I’m passionate about.
12:32MARCOMy name is Marco Benti from Italy, representing this group from LIBERTY Magona. We’re happy with this result, but we are even happier that we have changed the way of work on safety.
12:45IVANAMy name is Ivana Petrushevska, I’m from LIBERTY Skopjie. The first thing that came on my mind when we heard that we won, we were screaming (laughs) I can say that there were some tears, we were so happy, we felt like we did amazing job and someone saw that and we received a great recognition.
13:10JASONHello my name is Jason Ford, LIBERTY Steel Georgetown.  When he said that we won what actually went through my mind, I want to share it with everyone, my whole family, my wife, I wanted to jump up and wanted the scream but had to compose myself you know because there’s a room full of guys, you know?
13:27CHLOEThere were 220 nominations from across the world recognising colleagues work and contributions. Sanjeev, I imagine you’d like to encourage everyone listening now to get involved in the Global Chairman’s Awards 2022 and exceed that total?
13:41SANJEEVYeah, Chloe, absolutely. it’s always, always important to work hard but also to celebrate. So, when you have success you have to recognise it, you have to celebrate it always. Another point is, it brings the whole group together, right. When you see people across different countries which you haven’t met, you don’t really understand their business fully, but you see all these participation, it’s one of the few things where we are truly able to sort of bring all of GFG globally together so I would certainly sincerely encourage bigger and bigger participation and I will make efforts to encourage that as we go along.
14:12chloeAs we head towards the end of the year, what would you say your messages for colleagues about  GFG’s focus, following the refinancing news?
14:21SANJEEVI mean it’s been a year like none ever in history, we’ve had some incredible events which have shaken us to our very core. And I’m very proud of how we have managed to react to those. I would say we started to come out of them, the momentum is building we’ve done our big refinancing in Australia, others are following, UK will find solutions too. So, there is a lot of work to do, a lot of work to do ahead, I think the next six months, nine months will be a lot of work but we’re certainly on the way, so that’s something to be incredibly proud of and incredibly grateful for. And I am really grateful to everybody in the group who has kept the faith and continues to believe in GFG and its values. I mean, what we stand for, what we’ve always stood for, is, is incredible. And is being now accepted and becoming mainstream everywhere in industry. We stood for decarbonised industry long before people really believed in it, whether it was GREENSTEEL or GREEN ALUMINIUM or renewables. Now, this has become mainstream, hydrogen is becoming mainstream also. So all of these things, I think are the future, certainly for the next years, decades, for the next generation let’s say they’re definitely the future. This will also play out in a COP 26 shortly, which we’ll participate in and I’m looking forward to that. So, what we’ve done so far is incredible, we had a shock, we’ve handled that shock and we’re coming out of it. And what we look forward to is definitely right, so congratulations to everybody who participated and a big thank you.
 Well, that’s it for now. But in the meantime, if you have a question you’d like to ask Sanjeev, do please get in touch – email your question to spoken@gfgalliance.com, that’s spoken@gfgalliance.com. Sanjeev, thanks for now and speak to you again soon on our next episode.
16:03SANJEEVThank you, Chloe, great talking.

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Sanjeev gives an update on the refinancing activities…
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