Liberty Steel has not given up on the idea of investing in hot-end steel production at its hot-rolled coil line in Newport, according to a memo sent to employees by executive chairman Sanjeev Gupta.
The company is also considering investing in its Rotherham speciality steel furnaces. It is developing plans for "industrial scale pilot plants to explore hydrogen steelmaking" at several of its sites, Gupta said in the note.
The company has launched a review of operations at its loss-making Whyalla plant and will launch similar initiatives across the group where required, the note said. It asked each business to target 20-30pc efficiency gains, as announced in a public release issued by Gupta Family Group Alliance yesterday. But this does not mean a 20-30pc cut in headcount across the business.
"Given unpredictable demand patterns and lower production levels we are also quickly adapting our production philosophies, changing and optimising our raw material mixes, questioning our entrenched operating practices — all in all transforming ourselves to a more agile and efficient model based on the new realities of our industry," Gupta said.
The actions are designed to reduce costs and make operations more productive, rather than cutting output any further, the company said.
Liberty's Newport HRC line will continue to produce and has a "model that allows it to flex production levels", as it has done over the last few months. The site has low fixed costs and can lock in profitable margins back-to-back with slab suppliers despite a reduction in HRC prices of late.
