The San­jeev Gupta-led GFG Al­liance is spend­ing big on its am­bi­tious strat­egy to sub­vert Aus­tralia’s dom­i­nant ‘dig and de­liver’ ap­proach.

The Australian Mining Review - - FRONT PAGE - EL­IZ­A­BETH FABRI

Bri­tish bil­lion­aire San­jeev Gupta’s GFG Al­liance is on an Aus­tralian spend­ing spree. The new owner of Ar­rium’s Whyalla has big plans to put Aus­tralia on the map as a global leader in ver­ti­cally in­te­grated steel and alu­minium pro­duc­tion — and the path to achieve this is noth­ing short of impressive.

GFG’s land­mark ac­qui­si­tion of Ar­rium’s Whyalla steel­works in Au­gust 2017 was just the first step in San­jeev Gupta’s plan to trans­form Aus­tralia’s steel and alu­minium in­dus­try, and be­come one of the coun­try’s largest re­new­able en­ergy pro­duc­ers.

Mr Gupta has al­ready made a big name for him­self and his $14.5 billion business in the UK — and more re­cently the US and Europe — where he has res­cued and re­vived a num­ber of dis­tressed met­als, min­ing, en­gi­neer­ing and power gen­er­a­tion op­er­a­tions over the last three years.

His core business strat­egy is to own and man­age as much of the sup­ply chain as pos­si­ble – adding value at each stage.

The GREENSTEEL model is de­signed to se­cure a com­pet­i­tive, low-car­bon fu­ture for me­tal man­u­fac­ture through re­cy­cling, use of re­new­able en­ergy and ver­ti­cal in­te­gra­tion; de­fy­ing com­mon per­cep­tions of me­tal man­u­fac­ture as a dy­ing in­dus­try.

In Aus­tralia, Mr Gupta plans to repli­cate this business model.

In April 2017, the group an­nounced it had em­ployed se­nior in­ter­na­tional met­als and min­ing ex­ec­u­tive Michael Mor­ley to spear­head the ac­qui­si­tion of the Ar­rium business.

But Ar­rium, the corner­stone of the Group’s Aus­tralian strat­egy, wasn’t al­ways a ‘done deal’ for GFG Al­liance.

The ac­qui­si­tion took months of back and forth and ex­ten­sive re­search, Mr Gupta’s right hand man, GFG Al­liance chief in­vest­ment of­fi­cer and SIMEC Group en­ergy and min­ing chief ex­ec­u­tive Jay Ham­bro said.

“It was very tir­ing, I com­muted back and forth from Europe to Aus­tralia about 12 times last year, and never for more than about five days at a time,” Mr Ham­bro told The Aus­tralian Min­ing Re­view.

“But do­ing that sort of trav­el­ling gives you plenty of time to think and con­tem­plate your ac­tions, and I think we set about that [ac­qui­si­tion] process very ef­fec­tively.

“We did a huge amount of due dili­gence on all of the busi­nesses, and we had a very good team analysing it which put us in a very strong po­si­tion.

“We also en­joyed a strong re­la­tion­ship with the Govern­ment and got to know Mal­colm Turnbull and Min­is­ter Sin­odi­nos very well.

“They said ‘ look, we want com­pa­nies like you in Aus­tralia, and we look for­ward to work­ing with you to pro­vide the en­vi­ron­ment you need to in­vest here’.”

The ac­qui­si­tion was a two horse race, with a Korean con­sor­tium also vy­ing for the Ar­rium as­sets.

How­ever, Mr Ham­bro said it was al­ways com­fort­ing know­ing the Aus­tralian peo­ple and Govern­ment were in its cor­ner.

“I think it was heart-warm­ing when­ever we were in­volved that peo­ple wanted us there,” he said.

“We are a group that has a long his­tory of in­dus­trial growth, a very strong his­tory of in­dus­trial turn­around, and so we were al­ways very wel­comed by the man­age­ment team be­cause I think they saw us as a safe pair of hands to ste­ward this business on­wards.

Im­age: GFG Al­liance. Pho­tog­ra­phy: Sean Kelly

Al­lim­ages:GFGAl­liance. Pho­tog­ra­phy:SeanKelly.

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