GFG Alliance expanding into Europe

SIMEC Chief Investment Officer Jay Hambro Regional Council of Hauts-de-France President Xavier Bertrand and GFG Alliance Chairman Sanjeev Gupta.
SIMEC Chief Investment Officer Jay Hambro Regional Council of Hauts-de-France President Xavier Bertrand and GFG Alliance Chairman Sanjeev Gupta.

Sanjeev Gupta's GFG Alliance has marked the start of a major expansion into continental Europe by launching a €2 billion investment program in France.

As part of this program, GFG's industrial arm Liberty House has made a binding conditional offer to Rio Tinto to buy Europe’s largest aluminium smelter based in Dunkerque, France.

The offer triggers a statutory consultation with employees, European Works Council and stakeholders and, subject to a successful outcome to this process, Liberty says it has ambitious plans to invest and develop the 570-worker plant, potentially creating thousands more jobs on-site and in the wider economy.

Liberty wants to capitalise on the growing market for aluminium components among Europe’s vehicle manufacturers by working with stakeholders to develop downstream manufacturing activities linked to the smelter at Dunkerque.

It is estimated that the total aluminium content in European-made vehicles will rise from 3.3m to 4.3m tonnes a year by 2024 and the global use of aluminium auto body sheet will more than double in the next 10 years.

This is driven by the trend towards lighter-weight vehicles with a lower carbon footprint.

Today’s announcement follows recent confirmation that Liberty is engaged in a formal bidding process to acquire Asco Industries.

Asco has steel mills and service centres at six locations across France, employing around 1,500 people.

The Asco business is similar to Liberty’s Speciality Steel’s business in the UK, where the operation is a key supplier to the UK automotive and aerospace sectors, and is a core part of GFG's Greensteel vision.

The company said it is attracted to invest heavily in France by the very pro-business environment being created by the Macron Government.

GFG Alliance Chairman Sanjeev Gupta said: “Our detailed analysis leads us to believe that Dunkerque is the best location to drive forward our downstream automotive strategy.

“Aluminium Dunkerque has a high-quality aluminium operation benefiting from a top-class workforce and management. This will be our key strength when embarking on our ambitious plans.

“Subject to the outcome of the consultation process we look forward to welcoming the team and local community into the global GFG family on completion of the sale.”

The aluminium smelter based in Dunkerque, France.

The aluminium smelter based in Dunkerque, France.

Mr Gupta added: "We want to develop the plant into an international centre of aluminium and downstream aluminium products expertise, demonstrating our GREENALUMINIUM strategy.

“This investment will help fulfill our ambitions in the sector, further enabling us to capitalise fully on expected growth in demand for aluminium over the coming years.

“In 2016 we acquired Rio Tinto’s Scottish operations where are now building a high-value-added automotive components plant. We look forward to building an equally productive partnership with the French Government.

“This is GFG’s first significant step into continental Europe, which we will hope to build on. We are particularly attracted by the pro-business environment that President Macron’s France is quickly building.

“This has motivated our ambition to establish a global hub for the group in France, not only investing heavily in aluminium, steel and automotive, but also bringing our other divisions including energy, banking and property development to explore opportunities in France and Europe, also complementing and supporting Dunkerque.”

Rio Tinto’s chief executive Aluminium Alf Barrios said the sale was the right move.

“The binding offer for the sale of Aluminium Dunkerque represents the best option for the future development of the site.”