More than three years after he nearly bought the UK-based Port Talbot plant from Tata Steel, Indian-origin metals tycoon Sanjeev Gupta has repeated his offer.
"If we are offered, we are ready to look at it. We have a strong relationship with the Tata Group, and are ready to explore any kind of partnership with them," Gupta told Moneycontrol in an interview.
"The question is of Tata's drive. Am always ready," the billionaire owner of Liberty Steel Group, added. Liberty Steel is part of the $20 billion GFG Alliance, owned by the Gupta family, and operates across steel, aluminium and energy sectors.
The offer comes at a time when Tata Steel's European unit continues to struggle but could be close to clinching a life-saving deal with the UK government to get financial aid to revive the Port Talbot plant, which is located in Wales. While the company had asked for a 500-million pound aid, it is not clear yet how much the final assistance would be.
Also, a senior executive points out that the UK government will only provide assistance over a business plan that envisions the facility making money. "Right now that looks difficult," says the senior executive. There are reports that the UK government may take equity in the plant, in return for the financial assistance.
Tata Steel Europe is also facing problems in its Netherlands unit, where workers have gone on a strike.
In 2017, Gupta had taken over the speciality steel businesses of Tata Steel UK, in a deal worth about 100 million pounds. These included facilities in Rotherham, Stocksbridge and Brinsworth. The deal had also initially included the Port Talbot facility.
"We were one hair's breadth away from doing it," is how Gupta described the moment in an interview with BBC in 2017.
The entrepreneur continues to rue the missed opportunity. "We were ready to take over all of Tata Steel's operations in the UK. But then changes happened," he says.
Though Gupta didn't elaborate on the 'changes,' industry executives point at the developments at Bombay House, the headquarters of the Tata Group. In 2016, the then chairman Cyrus Mistry was ousted in a board room tussle. "While Mistry was keen to exit the UK steel businesses, the view changed later on," is how a senior industry executive explains it.
That Gupta continues to have an eye on Port Talbot is clear in the way he talks about the unit. "It's just a 20-minute drive from my home, where am presently residing," he says over a Microsoft Teams call.
Close to Tata Steel UK's facility is Liberty's Newport unit, which is investing on a new electric arc furnace that will use scrap to make steel, a process that now Gupta champions and calls 'GREENSTEEL.'
The turnaround
From the time he acquired units from Tata Steel, Gupta invested in the facilities, and even turned them around.
"If you look at other sales of Tata Steel UK units, including those in Teeside and Scunthorpe, neither worked out. But we have turned around Rotherham, and all the other facilities were ramped up and were making money before COVID-19 struck," says Gupta.
The Rotherham unit was producing 2.25 lakh tons of steel a year, when Gupta bought it. The businessman has already doubled the capacity and now wants to further expand it to over a million tons a year.
While the expansion plan is on, Gupta has streamlined production at all his units across Europe, to adjust to the demand slump post-COVID-19.
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