News GFG on board as joint major sponsor
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RussellEbertHandball
Flick pass expert
Here is a BBC Wales, 48 minute report - Man of Steel: Sanjeev Gupta - by their business journo Brian Meechan that was aired in November 2017, a few months after Sanjeev Gupta bought out Arrium's total assets in Oz for $700m ie Arrium Mining and their magnetite and hematite iron ore deposits in the Middleback Ranges on Eyre Peninsula, Arrium Mining Consumables - grinding media supplied to the global mining industry, and the OneSteel Steel and Recycling division comprising manufacturing, distribution and recycling businesses at Whyalla and sites all over Australia.
The doco starts off with the controversy of Tata Steel selling their Port Talbot plant in Wales in 2016, and people wondering WTF was Sanjeev Gupta and how could he succeed when a massive conglomerate like Tata had failed and the potential collapse of the British steel industry. Brian Meechan said he knew who he was, because he interviewed Gupta previously and discussed his plans to rebuild British Steel starting with "an outrageous gambit at another south Wales plant (Newport)" which he purchased in 2013 and he shut it down for over a year paying 150 employees to do nothing and stay with the company while he restructured its production facility.
I remember watching the 2015 story journo Brian Meechan did for BBC World News and can still remember the scenes from the story in the video below between 1:00 and 1:12. I had no idea who Gupta was and forgot his name after watching the story but I talked to my colleague about it at the time, because he was involved in the Port Kembla Harbour Task Force that BHP set up to improve productivity and industrial relations at the Port, and he went from Wollongong City Council representative, to chief technical adviser to chairman of the task force between 1983-1992. BHP didn't pay anyone on the task force but they said they had access to all BHP personnel and resources and he ended up not only working on the Port stuff, but also working with staff in the steelworks - technical, management and production staff. He authored the final report on the task force which won some awards. Since I started working with him he has talked about the need to crank up production at both Port Kembla and Whyalla and was pissed off that BHP wound it down and lost so many good people who were world leaders in steel production to concentrate on mining.
I asked him about the story I saw on BBC World News, and he was convinced that the British Steel industry wasn't dead if the right person who understood it took it over he/she could run it profitably and the same in Oz. I asked him about holding onto to staff and paying them even with no work and he said that provided he had the funding it was a good idea because once you lose that knowledge base you can't easily get it back and you need it if you are going to grow the business by a decent amount.
chiwigi any of your relatives back in Wales work at any of these steelworks or live in Newport or Port Talbot and seen Gupta at work reinvigorate the steelworks in those cities??
In the BBC Wales story below you see that Gupta moved his family from Dubai to south Wales to be close to sites just like he has been prepared to move the family to Sydney to make sure he is close to Whyalla and other Oz assets.
Watch the story and see Gupta's commitment to community. He said he just can't sack people. His Indian traditions guided him to look after his people. You see how important family is to him. He can throw a good party though. Maybe one day soon he throws a good one for the club after we get some success.
The doco starts off with the controversy of Tata Steel selling their Port Talbot plant in Wales in 2016, and people wondering WTF was Sanjeev Gupta and how could he succeed when a massive conglomerate like Tata had failed and the potential collapse of the British steel industry. Brian Meechan said he knew who he was, because he interviewed Gupta previously and discussed his plans to rebuild British Steel starting with "an outrageous gambit at another south Wales plant (Newport)" which he purchased in 2013 and he shut it down for over a year paying 150 employees to do nothing and stay with the company while he restructured its production facility.
I remember watching the 2015 story journo Brian Meechan did for BBC World News and can still remember the scenes from the story in the video below between 1:00 and 1:12. I had no idea who Gupta was and forgot his name after watching the story but I talked to my colleague about it at the time, because he was involved in the Port Kembla Harbour Task Force that BHP set up to improve productivity and industrial relations at the Port, and he went from Wollongong City Council representative, to chief technical adviser to chairman of the task force between 1983-1992. BHP didn't pay anyone on the task force but they said they had access to all BHP personnel and resources and he ended up not only working on the Port stuff, but also working with staff in the steelworks - technical, management and production staff. He authored the final report on the task force which won some awards. Since I started working with him he has talked about the need to crank up production at both Port Kembla and Whyalla and was pissed off that BHP wound it down and lost so many good people who were world leaders in steel production to concentrate on mining.
I asked him about the story I saw on BBC World News, and he was convinced that the British Steel industry wasn't dead if the right person who understood it took it over he/she could run it profitably and the same in Oz. I asked him about holding onto to staff and paying them even with no work and he said that provided he had the funding it was a good idea because once you lose that knowledge base you can't easily get it back and you need it if you are going to grow the business by a decent amount.
chiwigi any of your relatives back in Wales work at any of these steelworks or live in Newport or Port Talbot and seen Gupta at work reinvigorate the steelworks in those cities??
In the BBC Wales story below you see that Gupta moved his family from Dubai to south Wales to be close to sites just like he has been prepared to move the family to Sydney to make sure he is close to Whyalla and other Oz assets.
Watch the story and see Gupta's commitment to community. He said he just can't sack people. His Indian traditions guided him to look after his people. You see how important family is to him. He can throw a good party though. Maybe one day soon he throws a good one for the club after we get some success.
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Ford Fairlane
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Did anyone mention Tim Ginever's joke to warm up the crowd before the announcement on Saturday?
The AFL decided to hold a survey into which club’s supporters had the highest IQ. Of course Port Adelaide supporters were the most intelligent. Collingwood supporters were the dumbest. Eddie McGuire hears about this and is incensed. He holds a rally to prove the survey wrong.
Thousands of Collingwood supporters turn up to prove Eddie’s point. Eddie called Joffa out of the crowd and tells the assembled masses that now he would prove the AFL survey was wrong. He asks Joffa “What’s 10 plus 10?” Joffa thinks about it a while and says “17?”.
Eddie grimaces and thinks ok that was too hard. The crowd chant “Give him another chance, give him another chance”. Eddie thinks ok, this should do and asks “What’s 5 plus 5?” Joffa thinks about it a while and says “8?”. Eddie shakes his head and the crowd chant “Give him another chance, give him another chance”.
Eddie thinks I’ll make this really simple. Alright, he has to get this right and asks “What’s 2 plus 2?” Joffa thinks about it a while and says “4?”. Eddie throws his fists up in victory and the crowd chant “Give him another chance, give him another chance”.
The AFL decided to hold a survey into which club’s supporters had the highest IQ. Of course Port Adelaide supporters were the most intelligent. Collingwood supporters were the dumbest. Eddie McGuire hears about this and is incensed. He holds a rally to prove the survey wrong.
Thousands of Collingwood supporters turn up to prove Eddie’s point. Eddie called Joffa out of the crowd and tells the assembled masses that now he would prove the AFL survey was wrong. He asks Joffa “What’s 10 plus 10?” Joffa thinks about it a while and says “17?”.
Eddie grimaces and thinks ok that was too hard. The crowd chant “Give him another chance, give him another chance”. Eddie thinks ok, this should do and asks “What’s 5 plus 5?” Joffa thinks about it a while and says “8?”. Eddie shakes his head and the crowd chant “Give him another chance, give him another chance”.
Eddie thinks I’ll make this really simple. Alright, he has to get this right and asks “What’s 2 plus 2?” Joffa thinks about it a while and says “4?”. Eddie throws his fists up in victory and the crowd chant “Give him another chance, give him another chance”.
Doctor Feel
Shitposter In Chief
lol it was so bad it was good. It's certainly one for the dad joke memory banks.
Ford Fairlane
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I sent it to a Collingwood supporter at work and told him if he used it to sub in crows, Andrew Fagan and Steven Rowe for the Collingwood parts.
- Nov 6, 2014
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haha good one
proman_x
Premium Platinum
Do we have any idea what comes from this Sponsorship/Partnership ?
What is being invested into our club and what we are doing in return ? I understand it is a 5 yr agreement but that's about it for what I know about the deal.
What is being invested into our club and what we are doing in return ? I understand it is a 5 yr agreement but that's about it for what I know about the deal.
- Mar 1, 2014
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I liked Timmy's intro too.
Hi I'm Tim Ginever you might remember me from such premierships as 88 89 90 92 94 95 96.
Made me smile.
Hi I'm Tim Ginever you might remember me from such premierships as 88 89 90 92 94 95 96.
Made me smile.
PepeSilvia
Norm Smith Medallist
Money.
- Jun 12, 2012
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It is forbidden to make such enquiries. Just be content in the knowledge that it is probably more than what Oak was paying for the back of our guernsey i.e. a number greater than zero.
proman_x
Premium Platinum
Secret squirrel stuff hey. Nice to get a bit more cash into the club but not impressed with the members not being able to know what it entails.
powermacs
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Eh? They pay us money to be a joint major sponsor. Not sure what you need to know.
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Apologies if you are not impressed but Mr Gupta is putting in his PERSONAL money and he does not want the amount revealed. I am thankful he is putting in. It’s not all about the members having to know everything. We sook about everything and it is getting really tiresome.
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We don’t need exact figures but it would be nice to know if we achieved something approaching market rate with this deal. You need some transparency if you want accountability.
powermacs
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Given that it’s for 5 years you’d think it’s for the correct value. You wouldn’t lock something in for that long if it was just an ok deal.
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I certainly hope so. I guess I’ll have to wait until Inspector REH cracks the case to know for sure.
Doctor Feel
Shitposter In Chief
The F O R B I D D E N E N Q U I R Y
proman_x
Premium Platinum
I would like to think you know me better then that OGC, I do not sook about SFA. But I would like to know what we are receiving and what we are expected to do for it in return. If others don't give a toss that's fine. Asked a simple question to those that are far closer to Alberton then I.
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Sincere apologies Proman.
If Mr Gupta's contribution frees up money we have been spending on "making our community proud" to spend on "winning premierships" then good. If it's just extra money going to making our community prouderer for longerer, then meh.
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Has the salmonella outbreak been linked to Gupta yet?
- Mar 10, 2014
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It should.
RussellEbertHandball
Flick pass expert
I've been reading a lot of articles and watching a lot of videos, as well as the BBC Wales video/story I linked on the previous page, the last month since I found GFG's re-branding strategy video and found those articles from the AFR and Financial Times I posted on page 4. Thought it was time to put some of the info up here and join some dots.
Sanjeev Gupta is into vertical integration and looks like he wants to be the 21st century Andrew Carnegie and some.
He might not be a Scottish-American like Carneige, but he has substantial land holdings in Scotland - his JAHAMA Estates and its JAHAMA Highland Estates subsidiary, is the 5th largest private land holder in Scotland, he owns two hydro power stations and aluminium smelter operations in Scottish Highlands and they have large land holdings around those facilities, and I have no doubt he wants to be a big player in the USA steel production market and other businesses in the USA. Finance no doubt will be one of them as well.
Hopefully like Carnegie he becomes a philanthropist once he has had enough of business and down the track we become a regular long term part of his philanthropic activities.
He told his wife he will spend 2 years in Australia in late 2017 and you see them getting ready to depart for Sydney at the end of the BBC Wales story. Since he purchased that steelworks in Newport, Wales in late 2013 - ok since he reopened it in 2015, he has been on a massive buying spree to get vertical integration, benefits of economy of scales, synergies and to become a very diversified group, almost like GE is. High level of diversification only works if the CEO really understands all components and drives it.
That's why GE grew rapidly for 20 years under Jack Welch 1981-2001, (CEO and Chairman) when others who went into the diversification strategies in the 1980's and early 1990's failed and either went belly up, or cut back to its core business. Double digit interest rates and high debt levels also had its impact over most of that 20 years on those entrepreneurs.
Low interest rates and interesting financing methods by his Australian business partner Greensill Capital, founded seven years ago by Lex Greensil originally of Bundaberg, he seems to have avoided the traps of the 1980's entrepreneurs so far, who seemed to buy anything on a whim, once the western world went through huge financial deregulation and the banks easily lent money out, so they maintained their market share at any cost.
No Jack Welsh, and GE is struggling with its wide diversification strategies. Share price is a third of what it was 2 years ago, but market capitalization has plunged over the last 20 years. It was USD$12 bil when Welch took over in 1981 and started to greatly diversify. It hit peak value of $594 bil in August 2000 and was around $450 bil in 2001 when Jack Welch retired and handed over to Jeff Immelt a week before September 11 in 2001. It was $394 bil in October 2007, only $153 bil in October 2017 when Jeff Immelt was forced out a few months early on his planned retirement. In October 2018 Immelt's replacement John Flannery was voted out as CEO and chairman by the board, and current CEO and Chairman Lawrence Culp is the first outsider ever appointed to these positions. The market cap is now about $90 bil in Feb 2019.
GE since Thomas Edison's days has only had 12 CEO's and 11 Chairmen and until September 2018 was the only company in the Dow Jones Industrial Average Index that was there when it was created in 1896 with 12 stocks, and from 1907 when it was the Dow Jones top 30 stocks. Who knows how long it will be around for in its current form.
I reckon at the end of this year, Gupta will move back to UK or even USA as he continues to make large purchases in Europe and USA. If he wants big operations in USA then he will have to move there, especially as he said in his interview with Ticky Fullerton on Monday night, that he is looking at entering the capital markets in the USA later in the year. That will require him to spend a lot of time there and analysts will not like his opaque group structure and financing methods so he will have to sell that to them as well as change it, no doubt.
So well done to Koch and the club for engaging with him and catching him before he leaves Oz, and for signing the 5 year sponsorship / partnership deal.
Hopefully there will be a lot of set and forget components to the $$ side of this deal, with the opportunity to expand and link it to companies within the GFG group - eg like the SIMEC Zen Energy products I mentioned yesterday, in a post in the Lets Talk Ports Part 2 thread as well as the community stuff.
So Gupta spent $700 mil to buy Arrium's 3 divisions in Oz in July 2017 with official signing, 31st August buying;
1. Arrium Mining -The mines in the Middleback Ranges in Eyre peninsula that has magnetite iron deposits used in Whyalla steelworks (most desirable ore body) and hematite iron ore deposits that they ship to China. These export sales to China caused massive problems for Arrium's cash flow when low iron ore prices hit in 2015.
2. Arrium Mining Consumables - grinding media supplied to the global mining industry
3. OneSteel Steel & Recycling, comprising manufacturing distribution and its recycling businesses at Whyalla and around 200 sites all over Australia. The recycling business supplies scrap metal to foundries, smelters and steelworks in Australia and internationally
Then in December 2018 in front of the PM, federal opposition leader, Premier and state opposition leader, apparently the first time this has ever been done, he announced expansion plans for production to go from current 1.1~1.2 million tonnes capacity to 1.8 million tonnes to get Italian and Chinese consortium to help build these new facilities. This was a $600 mil announcement as GFG Alliance Whyalla (old Arrium You Tube site) put out this video.
You can see plenty of vertical integration and synergies in this video of the existing GFG group assets which included buying a coal mine for coking coal needed to make steel and that mine in Tahmoor is within 50km of Wollongong and Port Kembla, from Glencore in January 2018. The value of this deal wasn't announced, but it was estimated at $500m deposit and means 340 jobs in Tahmoor were secured.
Also announced in December 2018 at that big presser in Whyalla was that they would do a feasibility study into expanding Whyalla to a next generation steelworks which will probably take close to two years to do the feasibility study, and if that gets the go ahead, then there is another $700 mil investment.
Cheap energy will be the key driver for this to happen and GFG's energy division have announced they want to build 1 gigawatt of dispatchable renewable energy and they have started building the first of those projects, the 280MW Cultana solar project near Whyalla.
The Cultana solar farm will be built by SIMEC ZEN Energy, the company of which Gupta’s GFG Alliance now holds a 51 per cent stake. It will produce 600GWh of electricity a year from 780,000 solar panels. GFG's SIMEC bought that 51 per cent stake in ZEN Energy in September 2017 for an undisclosed amount.
In December 2017 it won a contract with the South Australian government under which the firm will supply at least 80 per cent of the government's energy needs until 2020 from wind and solar power and storage. Then from November 2020 SIMEC Zen will supply all of the SA government's energy needs for five years from the proposed $650 million, 150-megawatt Aurora solar thermal concentrating plant in Port Augusta. The state government contract win marked the first big deal for SIMEC Zen since it signed off on a $700 million solar, battery and pumped hydro storage project in October to deliver power to the re-named Liberty OneSteel works in Whyalla.
Cultana started to be built in August 2018 and all up the a cost of and 1 gigawatt generation facilities GFG want, will cost all up about $1 bil. Payback will take maybe 8 to 10 years but then the on going running cost of renewable generation will be bugger all compared to fossil fuels and selling power into the grid will probably mean net energy costs will be negative at certain times of the year. And a lot of the infrastructure needed will be built with GFG Alliance materials that the group manufactures.
The pumped hydro renewable plant you may have heard that SIMEC Zen Energy are going to do a feasibility study on near Whyalla, will be situated at one of the mine sites in the Middleback Ranges that GFG purchased from Arrium.
As Gupta said when he bought the Tahmoor mine from Glencore;
“Through this purchase, we secure and de-risk an important feed for the Whyalla Steelworks.
“This, together with our iron ore mines in South Australia, now makes GFG the only fully-integrated Australian steel producer, whether from iron ore and coking coal to primary steel, or from scrap metal and renewable energy to GREENSTEEL.”
ergo what BHP used to do at Whyalla and Port Kembla for over 40 years!!
And if you are going to build all this at Whyalla and surrounding areas you need more people and Whyalla is expected to expand to 80,000 people by 2040. In the video produced by the Whyalla Council you will see there is plenty of infrastructure needs.
GFG vertical integration can be seen all over this video. GFG have a property division which owns commercial, industrial, agricultural and residential properties and has a development arm. If you are going to employ a s**t load of people doesn't it make sense that they use your bank?? They have a banking and financial services division Wyelands Bank Plc which if they get an Oz banking licence could provided- "the bank is also a provider of competitive retail deposits and savings services" - in Oz just like the UK. Lend workers and others in Whyalla them money to buy homes, that are built with a lot of GFG products, developed by GFG real estate arm and use GFG energy. Also small contractors supplying GFG could get financing from GFG's bank.
They need to train the work force. They have the GFG Foundation "which aims to address the growing skills gaps in industry and enable young people and experienced workers to reach their potential. In the UK - "Working with respected partners such as the Industrial Cadets programme, inspired by HRH The Prince of Wales and delivered by the Engineering Development Trust, the Foundation aims to help improve the prospects of 5,000 people over a three-year period."
I can see a major major upgrade of TAFE in Whyalla and scholarships handed out for STEM subjects degrees just like BHP used to do. There have an engineering services division which will no doubt make its way to Whyalla in some form.
https://www.gfgalliance.com/an-integrated-approach/engineering/
"Liberty Engineering is an international manufacturer of automotive and engineered solutions, with sites located in the United Kingdom, France and UAE. It combines the expertise of 15 businesses across 18 locations and delivers a range of products and services to customers mainly in the automotive commercial vehicles, yellow goods, motorsport, general engineering, aerospace, defence and construction sectors."
"Liberty Engineering is also one of the largest privately owned engineering enterprises in the United Kingdom and a major supplier to all domestic and global automotive and off-road sectors which includes powertrain, body in white, trim, chassis, interiors, braking and control electronics, as well as engineering, testing and advanced vehicle solutions, provided to customers such as JLR, Ford, Renault, Nissan, Peugeot and many others."
GFG bought 2 major businesses in France in late 2018. Liberty acquired the French manufacturer of aluminim wheels AR Industries and Liberty acquired Aluminium Dunkerque, the largest aluminium smelter in Europe. Gupta has talked about getting into the downstream automotive parts manufacturing - more than just wheel hubs. I've read in a couple places he wants to eventually get involved with electric cars. More vertical integration.
When SIMEC ZEN Energy signed a deal with French firm NEOEN in May 2018, - " for a 15-year power purchase agreement for SIMEC ZEN Energy to take most of the output from NEOEN’s Numurkah Solar Farm in northwest Victoria. This 100 MW renewable energy project is owned and developed by NEOEN and already supported by a 38 MW Green Certificate Purchase agreement by the Victorian Government "- it was signed at Kiribilli house in the presence of Turnbull and French President Emanuel Macron, the day he told Turnbull. your wife is delicious.
In the interview on Ticky on Monday night, Gupta talked about how he spent time at Versailles last year with Macron after he purchased French manufacturer of aluminum wheels AR Industries, and Europe's largest aluminium smelter at Dunkerque. I have no doubt that the French built subs in Osborne will be built with Whyalla steel made to DCNS' specifications and there will be a close relationship between GFG and the French, and another link to Port Adelaide area.
And from GFG Alliance's You Tube page you can see how busy they were around the world in 2018 and what's on the agenda for 2019 as Gupta welcomed back staff to work in early January.
I think Andrew Carnegie was reborn in the Punjab about 47 years ago.
Sanjeev Gupta is into vertical integration and looks like he wants to be the 21st century Andrew Carnegie and some.
He might not be a Scottish-American like Carneige, but he has substantial land holdings in Scotland - his JAHAMA Estates and its JAHAMA Highland Estates subsidiary, is the 5th largest private land holder in Scotland, he owns two hydro power stations and aluminium smelter operations in Scottish Highlands and they have large land holdings around those facilities, and I have no doubt he wants to be a big player in the USA steel production market and other businesses in the USA. Finance no doubt will be one of them as well.
Hopefully like Carnegie he becomes a philanthropist once he has had enough of business and down the track we become a regular long term part of his philanthropic activities.
He told his wife he will spend 2 years in Australia in late 2017 and you see them getting ready to depart for Sydney at the end of the BBC Wales story. Since he purchased that steelworks in Newport, Wales in late 2013 - ok since he reopened it in 2015, he has been on a massive buying spree to get vertical integration, benefits of economy of scales, synergies and to become a very diversified group, almost like GE is. High level of diversification only works if the CEO really understands all components and drives it.
That's why GE grew rapidly for 20 years under Jack Welch 1981-2001, (CEO and Chairman) when others who went into the diversification strategies in the 1980's and early 1990's failed and either went belly up, or cut back to its core business. Double digit interest rates and high debt levels also had its impact over most of that 20 years on those entrepreneurs.
Low interest rates and interesting financing methods by his Australian business partner Greensill Capital, founded seven years ago by Lex Greensil originally of Bundaberg, he seems to have avoided the traps of the 1980's entrepreneurs so far, who seemed to buy anything on a whim, once the western world went through huge financial deregulation and the banks easily lent money out, so they maintained their market share at any cost.
No Jack Welsh, and GE is struggling with its wide diversification strategies. Share price is a third of what it was 2 years ago, but market capitalization has plunged over the last 20 years. It was USD$12 bil when Welch took over in 1981 and started to greatly diversify. It hit peak value of $594 bil in August 2000 and was around $450 bil in 2001 when Jack Welch retired and handed over to Jeff Immelt a week before September 11 in 2001. It was $394 bil in October 2007, only $153 bil in October 2017 when Jeff Immelt was forced out a few months early on his planned retirement. In October 2018 Immelt's replacement John Flannery was voted out as CEO and chairman by the board, and current CEO and Chairman Lawrence Culp is the first outsider ever appointed to these positions. The market cap is now about $90 bil in Feb 2019.
GE since Thomas Edison's days has only had 12 CEO's and 11 Chairmen and until September 2018 was the only company in the Dow Jones Industrial Average Index that was there when it was created in 1896 with 12 stocks, and from 1907 when it was the Dow Jones top 30 stocks. Who knows how long it will be around for in its current form.
I reckon at the end of this year, Gupta will move back to UK or even USA as he continues to make large purchases in Europe and USA. If he wants big operations in USA then he will have to move there, especially as he said in his interview with Ticky Fullerton on Monday night, that he is looking at entering the capital markets in the USA later in the year. That will require him to spend a lot of time there and analysts will not like his opaque group structure and financing methods so he will have to sell that to them as well as change it, no doubt.
So well done to Koch and the club for engaging with him and catching him before he leaves Oz, and for signing the 5 year sponsorship / partnership deal.
Hopefully there will be a lot of set and forget components to the $$ side of this deal, with the opportunity to expand and link it to companies within the GFG group - eg like the SIMEC Zen Energy products I mentioned yesterday, in a post in the Lets Talk Ports Part 2 thread as well as the community stuff.
So Gupta spent $700 mil to buy Arrium's 3 divisions in Oz in July 2017 with official signing, 31st August buying;
1. Arrium Mining -The mines in the Middleback Ranges in Eyre peninsula that has magnetite iron deposits used in Whyalla steelworks (most desirable ore body) and hematite iron ore deposits that they ship to China. These export sales to China caused massive problems for Arrium's cash flow when low iron ore prices hit in 2015.
2. Arrium Mining Consumables - grinding media supplied to the global mining industry
3. OneSteel Steel & Recycling, comprising manufacturing distribution and its recycling businesses at Whyalla and around 200 sites all over Australia. The recycling business supplies scrap metal to foundries, smelters and steelworks in Australia and internationally
Then in December 2018 in front of the PM, federal opposition leader, Premier and state opposition leader, apparently the first time this has ever been done, he announced expansion plans for production to go from current 1.1~1.2 million tonnes capacity to 1.8 million tonnes to get Italian and Chinese consortium to help build these new facilities. This was a $600 mil announcement as GFG Alliance Whyalla (old Arrium You Tube site) put out this video.
You can see plenty of vertical integration and synergies in this video of the existing GFG group assets which included buying a coal mine for coking coal needed to make steel and that mine in Tahmoor is within 50km of Wollongong and Port Kembla, from Glencore in January 2018. The value of this deal wasn't announced, but it was estimated at $500m deposit and means 340 jobs in Tahmoor were secured.
Also announced in December 2018 at that big presser in Whyalla was that they would do a feasibility study into expanding Whyalla to a next generation steelworks which will probably take close to two years to do the feasibility study, and if that gets the go ahead, then there is another $700 mil investment.
Cheap energy will be the key driver for this to happen and GFG's energy division have announced they want to build 1 gigawatt of dispatchable renewable energy and they have started building the first of those projects, the 280MW Cultana solar project near Whyalla.
The Cultana solar farm will be built by SIMEC ZEN Energy, the company of which Gupta’s GFG Alliance now holds a 51 per cent stake. It will produce 600GWh of electricity a year from 780,000 solar panels. GFG's SIMEC bought that 51 per cent stake in ZEN Energy in September 2017 for an undisclosed amount.
In December 2017 it won a contract with the South Australian government under which the firm will supply at least 80 per cent of the government's energy needs until 2020 from wind and solar power and storage. Then from November 2020 SIMEC Zen will supply all of the SA government's energy needs for five years from the proposed $650 million, 150-megawatt Aurora solar thermal concentrating plant in Port Augusta. The state government contract win marked the first big deal for SIMEC Zen since it signed off on a $700 million solar, battery and pumped hydro storage project in October to deliver power to the re-named Liberty OneSteel works in Whyalla.
Cultana started to be built in August 2018 and all up the a cost of and 1 gigawatt generation facilities GFG want, will cost all up about $1 bil. Payback will take maybe 8 to 10 years but then the on going running cost of renewable generation will be bugger all compared to fossil fuels and selling power into the grid will probably mean net energy costs will be negative at certain times of the year. And a lot of the infrastructure needed will be built with GFG Alliance materials that the group manufactures.
The pumped hydro renewable plant you may have heard that SIMEC Zen Energy are going to do a feasibility study on near Whyalla, will be situated at one of the mine sites in the Middleback Ranges that GFG purchased from Arrium.
As Gupta said when he bought the Tahmoor mine from Glencore;
“Through this purchase, we secure and de-risk an important feed for the Whyalla Steelworks.
“This, together with our iron ore mines in South Australia, now makes GFG the only fully-integrated Australian steel producer, whether from iron ore and coking coal to primary steel, or from scrap metal and renewable energy to GREENSTEEL.”
ergo what BHP used to do at Whyalla and Port Kembla for over 40 years!!
And if you are going to build all this at Whyalla and surrounding areas you need more people and Whyalla is expected to expand to 80,000 people by 2040. In the video produced by the Whyalla Council you will see there is plenty of infrastructure needs.
GFG vertical integration can be seen all over this video. GFG have a property division which owns commercial, industrial, agricultural and residential properties and has a development arm. If you are going to employ a s**t load of people doesn't it make sense that they use your bank?? They have a banking and financial services division Wyelands Bank Plc which if they get an Oz banking licence could provided- "the bank is also a provider of competitive retail deposits and savings services" - in Oz just like the UK. Lend workers and others in Whyalla them money to buy homes, that are built with a lot of GFG products, developed by GFG real estate arm and use GFG energy. Also small contractors supplying GFG could get financing from GFG's bank.
They need to train the work force. They have the GFG Foundation "which aims to address the growing skills gaps in industry and enable young people and experienced workers to reach their potential. In the UK - "Working with respected partners such as the Industrial Cadets programme, inspired by HRH The Prince of Wales and delivered by the Engineering Development Trust, the Foundation aims to help improve the prospects of 5,000 people over a three-year period."
I can see a major major upgrade of TAFE in Whyalla and scholarships handed out for STEM subjects degrees just like BHP used to do. There have an engineering services division which will no doubt make its way to Whyalla in some form.
https://www.gfgalliance.com/an-integrated-approach/engineering/
"Liberty Engineering is an international manufacturer of automotive and engineered solutions, with sites located in the United Kingdom, France and UAE. It combines the expertise of 15 businesses across 18 locations and delivers a range of products and services to customers mainly in the automotive commercial vehicles, yellow goods, motorsport, general engineering, aerospace, defence and construction sectors."
"Liberty Engineering is also one of the largest privately owned engineering enterprises in the United Kingdom and a major supplier to all domestic and global automotive and off-road sectors which includes powertrain, body in white, trim, chassis, interiors, braking and control electronics, as well as engineering, testing and advanced vehicle solutions, provided to customers such as JLR, Ford, Renault, Nissan, Peugeot and many others."
GFG bought 2 major businesses in France in late 2018. Liberty acquired the French manufacturer of aluminim wheels AR Industries and Liberty acquired Aluminium Dunkerque, the largest aluminium smelter in Europe. Gupta has talked about getting into the downstream automotive parts manufacturing - more than just wheel hubs. I've read in a couple places he wants to eventually get involved with electric cars. More vertical integration.
When SIMEC ZEN Energy signed a deal with French firm NEOEN in May 2018, - " for a 15-year power purchase agreement for SIMEC ZEN Energy to take most of the output from NEOEN’s Numurkah Solar Farm in northwest Victoria. This 100 MW renewable energy project is owned and developed by NEOEN and already supported by a 38 MW Green Certificate Purchase agreement by the Victorian Government "- it was signed at Kiribilli house in the presence of Turnbull and French President Emanuel Macron, the day he told Turnbull. your wife is delicious.
In the interview on Ticky on Monday night, Gupta talked about how he spent time at Versailles last year with Macron after he purchased French manufacturer of aluminum wheels AR Industries, and Europe's largest aluminium smelter at Dunkerque. I have no doubt that the French built subs in Osborne will be built with Whyalla steel made to DCNS' specifications and there will be a close relationship between GFG and the French, and another link to Port Adelaide area.
And from GFG Alliance's You Tube page you can see how busy they were around the world in 2018 and what's on the agenda for 2019 as Gupta welcomed back staff to work in early January.
I think Andrew Carnegie was reborn in the Punjab about 47 years ago.
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Thanks REH. All I can say is WOW. What a visionary Mr Gupta is.
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