On Thursday, Sanjeev Gupta’s Liberty House re-opened a Welsh steel works it had acquired along with other steel products assets of the Caparo Group last year. The Tredegar plant will produce steel structural hollow sections and tubes largely for the construction industry, creating around 70 new jobs. Virinder Bahadur Garg, CEO of Libery Steel Newport and Liberty Steel Tredegar spoke to The Hindu about his ambitions for the plant, and his expectations that it will be relatively immune to both Brexit and the dumping of Chinese products on the European market.
You have re-invested 3.7 million pounds into the plant - what is this going into?
To restart a facility that was not operating for more than a year since it went into administration, and was not running to a good level. Before that we had to do a lot of re-equipping, revamp the IT systems, do market studies and look at what is viable. We can’t go to the market with the same product portfolio, so have had to improve the product mix and efficiencies in the mill.
What products will you be focusing on?
We are looking at 100 per cent of import substitution. At the moment, most of the steel comes from Italy and Turkey. We will be catering 100 per cent to the U.K. market, and 100 per cent of the raw materials will be coming from Newport.
Does that mean you are relatively immune to the weakening of the pound, which followed Brexit?
In the short term, the weakness of the pound will make imports non-competitive, which is good from our perspective.
Have you noticed an increased demand for local products?
Customers do want local products and another company that was producing a similar one has shut production, which is another move in our favour.
What is the outlook for demand in the construction sector, which you supply?
The consumption pattern is stable with positive growth of around 2 per cent. I don’t see a big reason for concern. In fact, what we have seen in the last 8 months is that prices have gone up 50 per cent, driven by demand and raw material prices and costs.
To what extent are you impacted by the dumping of products from outside the EU that is proving such a headache for the wider EU steel sector?
Competition for this product has been from Turkey and Italy — this is a low volume product, catering to the end-user market, and customers want a mix, so it doesn’t come from deep-sea destinations.
What is your ambition for the plant?
Before it went into administration, it was producing around 10,000 tonnes a year. We would be starting at around 30,000 next year with an ambition to reach 100,000 tonnes a year.
