Whyalla's steelworks 'will be profitable again'

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Posted

July 05, 2017 21:05:40

There is no reason why South Australia’s steelmaking business, Arrium, cannot once again become a profitable company once its sale goes through, its future owner says.

Arrium, which runs the steelworks in Whyalla, is being sold to British company Liberty House with final sale approval expected by the end of the month.

Chief executive Sanjeev Gupta said the plant was fundamentally sound and Liberty House, which is part of London-based GFG Alliance, will be making investments into the steelworks.

“The steelworks fundamentally is a sound plant, it does need certain investments which we will undertake as quickly as we can,” he told ABC News.

“Fundamentally there is nothing wrong with the steelworks that is there.

“It has its own iron ore, it has infrastructure, it has its own port, so there is no reason why this business cannot be profitable and we intend to make it one.”

Mr Gupta also reiterated Arrium’s current workforce would be safe.

“As far as workers are concerned, and we’ve stated this previously, my group and my family has never undertaken an investment which requires any turnaround in terms of the workforce or any hard redundancies.

“So there won’t be any in Whyalla either.”

He said the company had “a very good market share” adding to its potential profitability.

“First of all it’s the only producer of long steel in the whole country, so it has a very good place within the marketplace,” he said.

“It has all the natural resources, it has its own scrap-collection processing in the east coast, in Whyalla it has its own iron ore, it has its own port, so it’s got all the infrastructure, all the attributes, which are required to make it a successful business.

“So there is absolutely no reason with the right management, the right care and the right investments that the business cannot be profitable.”

The iron-ore giant went into voluntary administration in 2016, with debts of more than $4 billion.

A Korean consortium, headed by Newlake Alliance Management and JB Asset Management, and supported by POSCO, was selected as the preferred bidder in June, before being beaten by Liberty House.

Topics:

company-news,

states-and-territories,

government-and-politics,

steel,

industry,

whyalla-5600,

sa,

australia



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