GFG Alliance bets on a green future for European steel
Metals group invests heavily to boost capacity and sustainability at Eastern European plants
British-based commodities group GFG Alliance will invest €2bn ($2.15bn, £1.66bn) in its Eastern European steel business to boost production and make it more sustainable.
Most of the investment will be directed towards the group’s operations in Romania and the Czech Republic. A proportion will go towards installing electric furnaces, which can cut emissions by around 60 per cent compared with coal-fired equivalents.
Electric furnaces are also more cost-effective because they can be turned on and off to meet fluctuating demand, saving money for producers.
The investment represents a significant risk for GFG with European steel suffering as cheaper steel floods global markets.
Pascal Genest, CEO of Liberty Ostrava, the GFG company that runs the Czech steel business, said: “The preparation of this plan was not easy because we are facing one of the most difficult times for the steel industry in Europe. However, we are ready to transform Liberty Ostrava into a leading steel producer with clean production and quality products.”
Steel production accounts for around 7 per cent of all greenhouse gas emissions. Producers have come under increasing pressure from legislators to clean up their operations. GFG’s investment is likely to reduce the impact of future emissions-related costs.
GFG is led by entrepreneur Sanjeev Gupta, who has said he wants the group to achieve carbon neutrality by 2030. The business has grown rapidly by buying up and transforming underperforming metals-manufacturing plants around the world.
On Tuesday, February 18, GFG announced the purchase of Adhunik Metaliks, a bankrupt steel producer in India, for $60m.
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