Man of Steel: My critics call me crazy – but I’ll prove them wrong
Critics tell him he’s crazy – and fear his £12bn empire will crumble, but Prince Charles’s favourite tycoon is out to prove them wrong
IN THE eyes of Prince Charles and his other well-to-do fans, Sanjeev Gupta is Britain’s saviour of steel – an entrepreneur whose investments will r evi t al i s e s wathes of t he nation and put us back on the global metals map.
To his critics, Gupta’s belief in British industry is too good to be true – and they fear his complex, hastily assembled business empire could turn out to be a house of cards.
For better or worse, Gupta, a 47year-old born in India and primarily based in t h e UK since secondary school, is likely to claim a major part in Britain’s modern industrial history.
In the course of a six-year buying spree, Gupta’s Liberty House – which he set up in 1992 as a commodity trading firm from his bedroom at Cambridge University – has revived several historic metal plants across the country.
He now commands a UK workforce of 5,000, has earned the nickname ‘ Man of Steel’ and was recently appointed by Prince Charles as the heir to the Throne’s industrial ambassador. ‘I don’t want to put it in this context, but most of those people wouldn’t have a job today if it wasn’t for the fact that we believed in them and in this industry,’ says Gupta, leaning forward on a shiny grey sofa in Libert y’s Mayfair headquarters, a converted townhouse that once served as his London home.
Gupta, who also owns a £4.5 million country mansion in Wales, bought into British steel at a time when other big companies were pulling out. Demand was falling and China’s grip on global production was rising.
Days after 2,000 Teessiders lost their livelihoods as Redcar’s coke ovens and blast furnaces were switched off in October 2015, Gupta – then a little-known businessman – restarted production at Newport’s steel plant, which had been closed two years before.
In the following years, he purchased numerous other metal sites that had either been given up on or were being wound down, including Tata Steel works in Hartlepool and Rotherham. He says production is up significantly at both, which are now profitable and employ more than 2,000 people collectively.
Liberty has also been busy buying up plants in continental Europe, the US and Australia – currently an area of particular focus for Gupta, who i s reportedly based in a £16,000-a-week Sydney apartment once occupied by pop star Bono.
Gupta’s investment thesis? ‘We think it is time for industry to return to developed countries,’ he says. ‘Every developed country – where industries started, prospered, flourished – has turned their back on industry in the past 20, 30 years. And we’re paying a price for that now.’
The UK economy has become too
service-focused, he says, and the switch to importing industrial materials has driven up costs.
‘The biggest thing it has done is divide society between the haves and have-nots,’ he pontificates. ‘Cities are prosperous and people are well-to-do. In industrial towns, or large parts of the country, people are disenchanted because industry has declined, there are less opportunities, less prosperity... I think it’s time for that to be rectified.’
Gupta, a non-campaigning Brexiteer, believes ‘strongly that industry can be prosperous’, albeit with a twist. His vision is for steel to be made from recycled scrap – which he believes will be plentiful in the coming years – rather than from scratch. But despite winning political plaudits – Gupta’s office is decorated with photographs of himself with both Prime Minister Theresa May and Scottish First Minister Nicola Sturgeon – he is increasingly having to contend with naysayers who doubt his ability to succeed where others have given up.
‘I don’t remember a time since I started the business 26 years ago that I’ve not been questioned on what we’re doing, how we’re doing it,’ he retorts.
‘All throughout the investment journey, starting when I bought the steel business in the UK – it was the height of the steel crisis, Redcar just closed – every meeting I went to, the first question was: “Are you crazy? Why do you think steel in the UK can be profitable?” And time after time – it’s not just one asset – we’ve bought dozens and dozens of assets and turned them around.’
Above Liberty House, Gupta – a workaholic who admits to only having taken two proper holidays – runs t he GFG ( Gupta Family Group) Alliance, an empire e comprising energy giant Simec, financial services arm Wyelands and real estate investor Jahama. Sprawled across five continents, GFG currently has 15,000 staff and annual revenues approaching £12 billion thanks to a recent spending spree.
Gupta admits his firm has become ‘a bit less wieldy’ because of its rapid growth and says he has come under pressure from ‘bankers, customers, suppliers, media’ to simplify and consolidate the group. He is also aiming to take parts of the business public – ‘the next evolution of the journey is definitely capital markets’ – in Australia and possibly the UK in the future. He hopes this will help the reputation of his business.
‘We don’t have accountability at the moment – which is part of the problem,’ he says. ‘I would like to have more accountability. So having external stakeholders – i. e. external capital, whether it’s debt or equity – means you have more accountability, more transparency, more governance.
‘ It’s basically evolution. We’ve grown largely through inorganic means. We’ve acquired businesses at pace – I can’t think of any other group that’s done so as fast as us in the past few years. And now it’s time to consolidate them to their full potential.’
And if things don’t go according to plan? How ruthless is Gupta – who admits he has never ‘actually sacked anybody’ – willing to be if his operations in t he UK and beyond flop?
‘It’s not in our DNA [to make ruthless cuts],’ he says. ‘That’s not to say that if really faced with this we wouldn’t have to take some corrective action. But it would be the last thing I do.
‘We’re not in a rush to exit something just because it’s tough. But that doesn’t mean that I will not be willing [to make cuts], if there is an insurmountable problem, if there is no future for something.
‘But almost all the time in life there is a way to find a future for everything. It’s just a question of how long are you willing to endure, how long are you willing to wait for your investment to turn.’
If Gupta’s grand plans do go awry, there will be a queue of critics waiting to tell him they told him so.
If he makes a success of steel, he will have surpassed expectations. And he admits this is part of what motivates him.
‘To be honest, it’s a satisfaction in itself – to prove people wrong,’ he says. ‘That challenge in itself is an attraction.’
Every developed country has turned its back on industry and we are paying a price for that now