Tuesday 18th February 2020
GFG Alliance today completed the strategic acquisition of Adhunik Metaliks Ltd (Adhunik) and Zion Steel Ltd (Zion) in a Rs -4.25 bn ($60m) cash deal. The transaction marks the Alliance’s entry into India – one of the world’s fastest growing steel markets.
GFG Alliance will introduce its GREENSTEEL model to revive the steel plants – combining steel recycling with low carbon and renewable power sources – to create a more sustainable, competitive operation serving local markets.
Commenting on the acquisition, the Indian-born British businessman and Executive Chairman of GFG Alliance, Sanjeev Gupta, said: “Today marks an important milestone in our global steel strategy with the purchase of Adhunik Metaliks and our entry into India – one of the fastest growing and most vibrant steel markets in the world. We see huge potential in this business through the introduction of our GREENSTEEL model to create a competitive, sustainable operation to serve the local market.
“It has been a challenging journey to get us to this stage, but we now look forward to starting work in partnership with all stakeholders to revive these plants and bring employment back. On a personal note, it is great to be investing in the country where my family began in the steel industry a generation ago.”
Adhunik is an integrated steel plant located at Chadrihariharpur near Rourkela in Odisha. The plant has both blast furnace and Electric Arc Furnace steel making capability with 0.5 million tonnes per annum capacity, and a 34MW captive power plant. Adhunik along with Zion Steel, its associated steel rolling facility, has a combined rolling capacity of 400k tonnes per annum. The sites produce products for the automotive, energy, engineering and oil & gas sectors.
The immediate focus will be on reviving and restoring the facilities and operations, and once stabilised the business will begin its integration into the LIBERTY Steel Group. In October 2019 GFG Alliance announced the consolidation of its steel businesses into one global entity – the LIBERTY Steel Group – the 8th largest steel producer in the world outside China, with operations in 200 locations in ten countries. LIBERTY Steel Group has a target to become carbon neutral by 2030 (CN30).