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Steeled for more success

How Sanjeev Gupta has led Liberty House and the GFG Alliance to reshape the steel industry in the UK and beyond

By Aine Doris 17 September 2018

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Sanjeev Gupta is a man with steel in his soul. Born into a prominent industrialist family from Punjab, his earliest memories are of his grandfather’s steel mills and his father’s factories.

This early exposure to industry not only shaped Gupta’s own interest in the steel industry, he says, it was also critical in him developing a lifelong desire for innovation. That creative edge undergirds his reputation as one of the world’s foremost steel barons – as well as the meteoric rise of Liberty House, the industrial and metals multinational Gupta founded in London in 1992. Liberty House is now the industrial and metal trading powerhouse of the wider GFG Alliance, which also includes renewable power generation, financial services, shipping and property ownership and management.

“As a child, I was exposed to the industrial interests of my father and grandfather and that’s where the spark igniting my own interest in steel came from,” he says. “But I think the key thing is the exposure itself. The more you’re exposed in early life to different things, the better you are at lateral thinking and innovating.”

Innovation is Gupta’s typical approach to most things. As an undergraduate economics and management student at Cambridge University, he began trading commodities and products from his dorm room – a minor misdemeanour for which college authorities invited him to move out of the university halls of residence. Undeterred, the young Gupta continued to grow his company, trading everything from steel to rice and sugar and even dried fish heads. By the time he graduated four years later, Liberty House was seeing exponential growth.

The years after university saw Gupta diversify into chemicals and agriculture but he eventually focused solely on trading ferrous and non-ferrous metals. Today it’s steel that Gupta is best known for. Dubbed the “Man of Steel” by the BBC, Gupta has been hailed for his “uncanny” ability to turn around the fortunes of the British steel industry – once the backbone of the nation’s economy.

Strengthening the British steel industry

Under Gupta’s leadership and driven by an appetite for “swimming against the tide”, Liberty and other GFG Alliance companies have, in recent years, systematically bought several major assets in the metals and engineering sectors. Among them were Rio Tinto’s hydro-powered aluminium smelter at Fort William, the last such smelter in the UK, and Caparo Industries’ engineering businesses in the Midlands. Several Tata Steel UK operations, including the flagship Speciality Steels business centred on South Yorkshire, have also been acquired. Through those deals, Liberty not only rescued thousands of jobs but also created hundreds more at a time when the British steel industry had become synonymous with mass layoffs. 

At the core of this success is an innovative concept called GREENSTEEL. Put simply, GREENSTEEL is GFG’s system of recycling readily available UK scrap metal to make high-grade steel products. As a business model, it neatly bypasses the need to import expensive raw materials from overseas in order to manufacture the steel. What’s more, Gupta has opted for a combination of renewable energy sources – hydro, wind, waste-to-energy and potentially tidal power – to fuel his electric arc furnaces, forgoing the legacy technology of coal-fuelled blast furnaces. His is a win-win strategy: one that delivers home-manufactured steel and aluminium to UK industry, creates jobs for local communities, drives economic efficiency and respects the environment.

And it’s a strategy that has seen Gupta and Liberty House make headlines around the globe: from the Financial Times to Forbes and more, the Gupta-Liberty modus operandi has captured the attention and admiration of the world’s business community.

“Our philosophy is to change things constantly, to challenge the status quo. What we are doing with Liberty House is looking at things through an alternative lens. So when we looked at the growing global need for more steel, we saw that there was no need to make it – we could simply recycle it. Instead of adding the existing stock of steel, it was clear that recycling was a far more viable alternative.”

Ask Gupta what he means by looking through an alternative lens, and he is clear that innovation is all down to keeping a firm eye on the future. “Being innovative is all about looking to the future and not the past. It’s about understanding tomorrow’s problem and how I’m going to address tomorrow’s needs. You ask yourself, ‘What are the attributes, circumstances or available materials of future markets going to look like – and how can we change ourselves, innovate and come up with new ways of doing things to respond to change?’

“If you look at the financial service industries, you see change happening exponentially in the world of fintech. Look at the way our urban systems are evolving and you see that we are increasingly becoming sharing communities. Apply the same thinking to steel and it’s clear the future is in recycling.”

Switching to renewable energy

Gupta’s thinking is driven not only by striving to stay a step ahead of competitors, but also by solid business sense. And renewable energy, he says, delivers cost efficiency with the potential to spark a “real revolution”.

“We’re moving towards real change in how energy can be produced and how the cost of producing that energy can be dramatically cut. The price of solar panels and such is becoming cheaper and cheaper and operational costs compared to fossil fuels are much more efficient. So rather than consuming a limited, finite resource, it makes better business sense to explore the alternatives.”

Exploring new approaches is very much on Liberty House’s agenda. The group Gupta founded as a college student now employs more than 14,000 people across 30 countries. And while GREENSTEEL remains the crux of Liberty and GFG’s strategy, true to its innovative form, the group has already diversified into financial services and is now looking to move into electric car manufacturing in Australia.

“It’s a very exciting time for us right now. In steel we are looking to expand from the UK, Europe and the US into Asia as the world is seeing the potential of what we do. On the automotive side, we’re looking to launch a new car, deploying a completely different way of manufacturing that we’re exploring. In banking, we’re looking at supply chain financing to spur the industry and keep the wheels oiled in the sectors where we’re operational.”

All of this, says Gupta, is part of an ongoing journey in innovation and evolution that sees the GFG boss constantly thinking about the next thing. “What drives me is the need to keep moving forward. To keep my eyes open for what is next on the horizon."

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