Trade threat prompts Gupta to spend more on European steel mills

The Liberty Steel CEO says he will focus on higher quality products.

British tycoon Sanjeev Gupta Liberty Steel plans to tackle the threat of a trade war to his steel business by pumping money into European factories he recently bought from ArcelorMittal.

According to CEO John Bolton, Liberty Steel plans to invest more than € 400 million ($ 443 million) over five years at seven sites to maintain capacity, expand product range and produce better products. The move comes when the industry faces US tariff challenges that redirect exports to Europe and drive up raw materials and energy costs.

Bolton said about half of the investment will go to the Galati plant in Romania, as growth prospects are better there than in other parts of Europe.

Steel producers
The EU accounted for 9% of steel production in January-July.

“We continually assess how the conditions of international trade are affecting our operations, but we believe that our operations in continental Europe are well positioned to deal with any negative impact,” Bolton said in an email response. “We expect key markets for our newly acquired European businesses to surpass the European average, for example in Romania, growth of 3.1%.”

It has been a challenging year for steelmakers in the European Union as sales have been constrained by weak demand for cars, sluggish global growth and cheap imports. Some of the additional shipments came from countries, including Turkey, which redirected sales after import duties were imposed in the United States.

In July, Liberty Steel paid € 740 million to acquire plants in the Czech Republic, Romania, North Macedonia, Italy and Belgium from ArcelorMittal. The Gupta Group currently employs about 30,000 people, following the deal

The manufacturer plans to increase sales from new plants by 50% by 2022 and wants governments to increase investment in infrastructure and energy to help support the economy and the growth of the steel industry. Bolton said there has been positive progress in this direction in the Czech Republic and Romania, adding that he is “very positive” about the future of the steel sector in Central Europe.

“The revitalized steel industry in these countries will support supply chains, stimulate the development of new sustainable energy sources, retain and create new skilled jobs, and create a more sustainable and competitive future for the industry,” he said.