Building a strong future for Scotland’s industrial economy - Jeffrey Kabel

Over the past six years GFG Alliance’s commitment to Scottish manufacturing has represented everything the company believes in. Our steel, aluminium and hydro power operations in Scotland crystallise GFG’s vision of combining manufacturing with renewable energy to deliver a sustainable industrial future. A vision that, while challenging to realise, is shared by many in politics, business and society in Scotland and across the UK.

It’s fair to say that in the period we’ve owned the assets in and around Fort William and to the southeast of Glasgow an extraordinary set of events has beset British industry. First the impact of Brexit on manufacturing in the UK, especially in the automotive sector. Then ongoing disruption created by the Covid-19 pandemic. And over the last year GFG in particular has been managing the impact from the collapse of our main lender Greensill Capital.

This combination of events has provided a challenging backdrop for GFG, as it would have done for any business. Yet over this period we have invested more than £275 million – a record showing that even in adverse conditions, determination to realise a shared vision and ambition can bring benefits.

It’s important to consider what could have happened without this investment. Dalzell and Clydebridge’s steel plants were closed by their previous owners in 2015 due to the tough outlook for the steel industry. The commitment of GFG and the Scottish Government since then to retaining the plants, as well as the supply chains and manufacturing skills they support, has ensured that some 140 direct jobs exist today that would otherwise have been lost.

Penstocks carrying water to Fort William aluminium smelter plant, Loch Linnhe in background. Picture: Getty Images

That commitment is evidenced too at Lochaber’s aluminium smelter in the foothills of Ben Nevis – Britain’s last such plant and a national strategic asset. While the slump in automotive sector demand meant plans to build a wheelmaking factory were no longer viable, the Highland Council has recently approved our plan to build a new recycling and billet casting plant on site, paving the way for a sustainable future there.

This will drive further investment in the operations and spend in the local and national economy. Our focus remains ensuring that future decisions enable Lochaber’s low carbon aluminium production to be a local and national asset for generations to come.

Having managed a period of adversity and change, we are looking to the future, notably our plans to expand Scotland’s international leadership in renewable energy with a new onshore wind farm at Glenshero, close to Lochaber. As well as our investment in steel and aluminium, GFG is one of the largest owners, developers and operators of Scottish hydropower stations, and an investor in tidal stream technology.

What’s more, our management of the magnificent local estates surrounding Fort William’s smelter offer a powerful example of responsible land management that puts local people at its heart.

GFG’s initiatives include a local housing programme and a major plan to sequester carbon emissions by developing woodlands and restoring peatland, which left untreated is a major emitter of carbon dioxide. We’ve planted more than 350,000 trees at the estate, primarily native hardwoods and broadleafs. And we’ve restored more than 100 hectares of peatland, with nearly 400 hectares more planned. When completed, this will store 468 tonnes of CO2 equivalent per year.

The commitment goes broader. We’ve provided golden eagle chicks to the South of Scotland Golden Eagle Project as they reintroduce the spectacular birds into the Scottish borders and the north of England. And we’ve supplied rare Mountain Aven wildflower seeds from the Grey Corries mountains to the John Muir Trust conservation charity to help restore this species on the slopes of Helvellyn in the Lake District.

All told it demonstrates GFG’s vision: combining industrial growth, renewable energy and sustainable development. We believe it’s the path to develop Scottish industry towards an economically, environmentally and socially sustainable future. And it’s the way to provide skilled and highly paid jobs in local communities.

The support of the Scottish Government for these enterprises has protected vital Scottish jobs at a critical time. GFG has been working steadily to refinance the group, helped by the robust demand outlook for steel and aluminium. We’re not out of the woods yet, especially given the rise in energy prices, but as we refinance our UK operations that will position us well to invest in Scotland's economy for the long-term.

Two short months ago, the world converged on Glasgow to take stock of the huge task ahead to cut carbon emissions. GFG is committed to play its part and we are now working as a business and with partners, including the Green Alliance, to achieve carbon neutrality by 2030. As we invest on the ground, we will be harnessing industrial communities across Scotland to help deliver on the green investment challenge.

We are deeply proud to play a part in Scottish industry. Over the last six years we’ve shown that we are committed even in the most challenging of circumstances. As the year begins, we’re looking ahead to a positive future and to harnessing the many assets that comprise Scotland’s unique economic base.

Jeffrey Kabel, Chief Transformation Officer, GFG Alliance