The GFG Alliance has set out both an accelerated investment programme and a productivity drive globally, targeting up to 30% overall efficiency gains, to adapt its businesses to the post-pandemic environment.
The company aims to deliver up to 30% in overall efficiency gains through overhead optimisation, efficiency and productivity programmes and a headcount reduction, the latter meaning job cuts, which the company believes is unavoidable, although it is exploring and exhausting all options to minimise the impact on employees.
According to the GHG Alliance, the pandemic has underlined the need to modernise plants to make them more flexible and efficient, which goes hand-in-hand with investment in low-carbon technology. The company has reaffirmed its commitment to develop environmentally sustainable GREENSTEEL and to progress towards carbon neutrality, as a group, by 2030.
As part of the group’s CN30 (carbon neutral by 2030) programme, the following investment plans are being prioritised across our three primary steel operations, for delivery over the next 3-5 years:
· A direct reduced iron (DRI) facility and two electric arc furnaces (EAFs) at Liberty Steel Galati in Romania, supported by the country’s Government, the national gas company, research and educational institutions
· Europe’s first hybrid furnace, blending EAF and blast furnace steelmaking, at Liberty Steel Ostrava in the Czech Republic, allowing the business to use higher volumes of local steel scrap and emit less carbon dioxide
· Transformation of the Whyalla steelworks in Australia through a transition away from its blast furnace in due course, by investment in an EAF, a DRI facility and a new state-of-the-art rolling mill
In addition to accelerating its CN30 investment programme and putting its businesses on a firm economic footing, GFG is implementing an immediate global efficiency drive to help adjust to a new market environment.
As a result of the COVID-19 pandemic, demand from steel consuming sectors in certain regions has dropped by between 20% and 40% – an impact which is likely to continue for 12 to 18 months, says GHG Alliance.
Sanjeev Gupta, executive chairman, GFG Alliance, commented: “The COVID-19 pandemic has impacted every one of the 35,000 people who work across our businesses. The crisis has prompted us to think differently about how our businesses are organised, how we will work in the future and how we best allocate our resources.”
Gupta said the primary focus will be on operational improvements and overhead optimisation and claims the business will consult closely with employees and do everything it can to mitigate the impact.