Is this the man who can save British steel?
As he buys up plants in Scotland
SANJEEV Gupta is away on business in Dubai but he is keeping a close eye on the meltdown of Tata Steel’s UK operations.
Gupta has already agreed to buy Tata’s unwanted sites at Dalzell and Clydebridge, and he says he may be interested in some of the Indian steelmaker’s other sites in Rotherham, Corby and Shotton, which are also now up for sale.
Britain’s steel industry may be on its deathbed but Gupta’s Liberty House has bucked the trend. It re-opened a steel mill in Newport, South Wales, last year and snapped up the rump of Lord Paul’s ailing Carparo Industries from administration.
What has he seen that others may have missed?
Gupta, 44, runs his hand over his shiny head and smiles.
‘We want to bring it back to full glory,’ he says of the steel works in Newport. It is going to be a tough journey. British steelmakers have been hit by slowing demand, high energy costs, ‘green’ taxes and a deluge of cheap Chinese product that has halved the global price of steel.
As a result, steelmaking in Britain is unprofitable. The squeeze on domestic producers has forced plants to close and thousands of jobs have been axed.
Gupta puts part of the blame on Brussels and the time it takes for the European Union to act.
His view on the EU is timely. So, is he in favour of Britain leaving the EU – the socalled Brexit?
‘I’m torn,’ he says. ‘For my industry I think it’s a good thing (to leave), but personally I don’t. As a world, we need to integrate more. The Government doesn’t have the freedom to act because it has to go through Brussels. Everything takes forever.’
GUPTA urges the Government to t ake f urther action to lower the cost of p o wer for energy-intensive industries.
‘They have already done a bit with the refund to energy-intensive industries,’ he says. ‘But even after that, it (the cost of power) is still double that of Germany and France.’
The steel boss wants policymakers to take more radical action.
‘Scrap the carbon tax for energyintensive industries. It kills industry, and industry will just continue to export production to another country where they don’t have the tax.
‘The Government is listening but the speed at which they can react is hampered by the EU because everything has to go through Brussels.’
Gupta retains the hassled demeanour of a busy commodities trader as he halts the questions to field calls on his mobile phone. He is dressed in a smart blue suit, crisp white shirt, striped tie and shiny black shoes.
But the grime, dust and toil of the steel mill is in his blood. He grew up in the Punjab with his two brothers and sister until the age of 12, when he was shipped off to boarding school – St Edmunds College in Canterbury.
He studied economics at Trinity College, Cambridge, where he was given a shock when the Dean told him he would have to leave. It was 1992 and the budding entrepreneur founded Liberty House, a commodities trading firm, and was running it from his student apartment. Gupta had been hauled in front of the panel of disapproving university Dons before, but this time he had pushed them too far by attempting to claim VAT back on his telex machine.
Gupta used his college address for the claim, which contravened the university’s charitable status.
‘I definitely missed a few heartbeats,’ he recalled. ‘But then I realised they were just throwing me out of my student apartment.’
The censure had little impact on Gupta’s business ambitions.
Liberty is now a £4.2bn-turnover company that employs more than 2,000 people across 30 countries.
The group has interests in steel, power and energy, industrials, financial services and property. It has also bought a minority stake in Tidal Lagoon Power. This plans to harness the power of the sea to generate electricity, starting with a £1bn project in Swansea Bay.
Gupta’s father was an industrialist who owned a number of businesses in India, including Victor bicycles.
‘My oldest memories are of being in steel plants and engineering plants. My mother was a typical Indian housewife. She’s the matriarch; she keeps the family together.’
Gupta’s father drilled into his son the value of ambition and integrity.
‘He always told me that my true heritage is his name – money will come and go,’ he says.
That desire to honour his family heritage will lead Gupta to start manufacturing bicycles next year at the old Carparo tubes plant in Oldbury in the Midlands.
Family is an important theme in Gupta’s life. He is married to Nicola, who is from Canvey Island, Essex, and used to be treasurer of one of his commodity businesses. Their love affair was kept secret from his family for eight years because they feared disapproval.
But now Gupta says she’s the most popular member of the family.
Gupta insists his swoop on the British steel industry is not some dewy-eyed, sentimental trip through family history. He suddenly sounds more like a hawk-eyed trader sizing up his prey.
‘At its worst point is when the investment is best and also when it is at its cheapest,’ he says. We are coming in at a point where we have nothing to lose.’
Gupta says those selling UK steel assets, such as Tata Steel, have got large debts and need to ‘minimise damage’.
‘I come from a trading background, so there’s a different mentality. We are quite happy to have a lot of small companies and put them together to make a much larger company.’
In his office at Uskmouth Power Station in Newport, Gupta looks out over the dock and Liberty’s neighbouring steel mill. It is an ideal vantage point to visualise the entrepreneur’s masterplan.
He wants to convert the coal-fired plant – bought by the Gupta family’s Simec subsidiary in 2014 from SSE – into a biomass power station.
This would produce cheap green energy to power an electric arc furnace in the neighbouring steel mill, where Liberty would melt down 2m tonnes of scrap metal each year. The finished steel would supply the former Carparo factories.
Production of molten steel in Britain is unprofitable due to energy costs and green levies. It is one of the key reasons why Britain is a net exporter of 7m tonnes of scrap metal.
‘Why make primary steel in a blast furnace when you already have secondary steel (in the form of scrap)? Why don’t we recycle the scrap first?’ he asks.
He recently bought an electric arc furnace from a disused steel plant at Sheerness in Kent and wants to install it at Newport. The move could create 1,000 jobs at the plant, which Liberty re-opened last year.
It’s all part of the plan that the canny trader hopes will prove he has the Midas touch by turning base metal into gold.