Billionaire industrialist Sanjeev Gupta has taken Scotland somewhat by storm in the past two years, hammering out a robust presence across the steel, aluminium and hydro-power sectors. But corporate appetite remains. The Indian tycoon who, in the spring of 2016, brought the Dalzell and Clydebridge steel-rolling mills back from their near-death experience, says he has “a dream project”.
Gupta, whose business empire spans 30 countries, says: “My dream is to make steel again. We roll steel in Scotland at the moment. But with Ravenscraig, Scotland was once a great, proud steel producer. That heritage has been lost at present.”
Saying it is too early to put a timeframe on fulfilling such a dream, he cites a plentiful supply of scrap north of the Border and “plenty of greenfield and brownfield sites” – not least around Ravenscraig – as conducive factors for a second golden age of steelmaking here.
Gupta, who originally ran a commodities trading company, has used his GFG Alliance business to make the Scottish inroads. Steel kicked it off. The Dalzell plate mill in Motherwell and the Clydebridge plant in Cambuslang were mothballed by owners Tata Steel in 2015, but rescued by GFG’s Liberty House metals subsidiary in 2016.
In an unusual deal, the Scottish Government bought the plants from Tata before selling them on to Gupta. He is full of praise about the part First Minister Nicola Sturgeon played in striking while the iron was hot. “Tata closed the mills but would not let them go but we wanted it [the business],” he says. “But Nicola Sturgeon and Holyrood were committed, relentless in the quest for what was good for the workers.” He says the can-do attitude of Holyrood has been a critical factor in GFG pursuing its wider corporate ambitions in the country. “If I’m honest, the most overriding motivation has been the Government, it has been exemplary. The pace they have acted at, they have not just been an enabler, but a good participant.”
It has also been good news for the First Minister. When Sturgeon formally reopened the Dalzell plant in September 2016 she hailed it as “a fantastic day for Dalzell workers, for Motherwell and for Scotland’s steel industry”. And the ball had been set rolling. Later that year, Gupta paid £330 million to buy an aluminium smelter plant and two hydro power stations in Fort William, again with Holyrood riding point.
Only last week GFG won planning permission from Highland Council for a new 400-worker alloy wheel factory next to the renamed Liberty British Aluminium shelter. It will be the UK’s only large-scale alloy wheel plant. Gupta says: “Everybody wanted to close the Fort William site. It was a mediocre aluminium site because of the size and location. But Holyrood did not want that to happen. They came to us. They felt it was attractive because it plugged supply-chain gaps. Those type of relationships are rare with governments.”
GFG now employs 450 workers in Scotland, with the wheel factory set to nearly double that. New steel jobs in Lanarkshire will depend on the speed with which the industry picks up. In addition, Gupta is planning investment of £170m to build a windfarm at Glenshero in the Highlands. The plan is that part of the plant will make the towers for Scottish wind turbines using plate steel from the Dalzell mill.
Speaking to Scotland on Sunday on the phone from Australia, Gupta warms to the theme of using aluminium from the adjacent smelter to manufacture up to two million wheels a year for the British car industry, with production starting in 2020. Cutting to the chase on the planning permission, Gupta says: “I’m very happy. It is an important moment, but it was inevitable. Now we can crack on.”
He believes the business opportunities are significant, saying the UK imports virtually all of its car wheels. “We make two million cars a year, that’s eight million wheels.” GFG thinks it can probably get a quarter of that output. Which brings us to bicycles. Liberty House acquired Livingston-based Shand Cycles in October 2017, adding to its Trillion bike manufacturing operations in the English Midlands. “It’s small but dear to our heart. We see it as a good opportunity.”
Gupta is passionate about his business generally, but he is almost evangelistic about “green” energy. By its moves into renewables in Scotland, his group is already one of the UK’s largest hydropower producers. Last December GFG’s Simec Energy subsidiary agreed to buy Green Highland Renewables, which is based in Perth and Dingwall and runs 18 hydro power schemes in the Scottish Highlands, from Ancala Partners. It also announced plans to develop a further eight hydropower plants it owns around Lochaber. Gupta says: “The world is turning renewable, but at a pace that is surprising to me. Solar is by far the cheapest renewable but it is not predictable like tidal power.”
The industrialist put more money where his mouth is last December when he brought the fast-growing Edinburgh-based tidal power firm Atlantis Resources into his business empire. The deal was done as a reverse takeover, with Atlantis Resources acquiring Uskmouth power station in south Wales. In return, Simec Energy will take a 49.99 per cent holding in the new entity, which will be renamed Simec Atlantis Energy. Gupta said at the time that the deal was powered by the belief that the potential to create enormous value in renewables in the near term was “tangible and exciting”. He is generous in his praise of the Scottish company, whose projects includes the massive MeyGen tidal energy plant in the Pentland Firth. “They are one of the best [at what they do] in the world. The team has real expertise and commitment to renewables,” he adds.
A key part of the deal is Simec Atlantis Energy converting the Welsh coal-fired plant into a green plant. Gupta says: “A big part of it will be waste. The world has a big problem with waste. This turns a challenge into an opportunity. It is groundbreaking, one of the first in the world. Fossil fuels to renewables, and our generation is on the cusp of it. It is a great privilege.”
The Atlantis deal exposed GFG, a private, family-owned business, to the stock market for the first time. The Scottish company has a quote on London’s Alternative Investments Market . Gupta described the partial stock market exposure at the time of the deal as a “milestone”, and has not let the grass grow under its feet. Last week Atlantis launched through Abundance Investment Ltd, the provider of a regulated green peer-to-peer investment platform, a five-year bond which matures in 2023. In financial terms it is small potatoes, raising between £2m and £5m. But opening up another financial avenue has a symbolic value. Gupta says there are “always pluses and minuses” in having a public listing, and speaks of the City’s putative short-termist approach.
“[Financial markets] can become short-term oriented. It was a definite concern to me. But we would never make the entire group a public company. In terms of the scale of our operations it [the bond] is not a big figure. But [access to financial markets] is a way of monetising long-term assets. And from a cultural point of view it was an important step. We have always been a private family company and we wanted to be more transparent and public-facing.”
For all its business strides in Scotland, GFG is an international operator with a London HQ. One GFG colleague says: “Sanjeev estimated one year that he slept more nights in the air than on the ground.” And the deals go on. Last month the group announced an agreed €2bn (£1.8bn) “binding conditional” offer to Rio Tinto for Europe’s biggest aluminium smelter in Dunkerque. The offer has triggered a statutory consultation with the plant’s employees as is customary under French law.
Ironically, Gupta is only a recent convert to doing major business in France, and cites new French President Macron as a key factor in his change of heart. He says: “I was not encouraged by France a couple of years ago. But President Macron started a turnaround. We like his energy very much. He is young, dynamic and wants to make a difference. The Dunkerque plant is one of the best aluminium sites in the world.”