Liberty House, the industrial arm of GFG Alliance, a London-based international group of businesses, has made a binding conditional offer to Rio Tinto to buy Europe’s largest aluminium smelter based in Dunkerque, France.
The offer triggers a statutory consultation with employees, European Works Council and stakeholders and, subject to a successful outcome to this process, Liberty says it has ambitious plans to invest and develop the 570-worker plant, potentially creating thousands more jobs on-site and in the wider economy.
In addition to serving existing customers with aluminium slab and ingots, Liberty wants to capitalise on the growing market for aluminium components among Europe’s vehicle manufacturers by working with stakeholders to develop downstream manufacturing activities linked to the smelter at Dunkerque.
It is estimated that the total aluminium content in European-made vehicles will rise from 3.3 million to 4.3 million tonnes a year by 2024 and that the global use of aluminium auto body sheet will more than double in the next 10 years. This is driven by the trend towards lighter-weight vehicles with a lower carbon footprint.
Referring to the Dunkerque agreement, executive chairman of the GFG Alliance, Sanjeev Gupta said: “Our detailed analysis leads us to believe that Dunkerque is the best location to drive forward our downstream automotive strategy. Aluminium Dunkerque has a high-quality aluminium operation benefitting from a top-class workforce and management. This will be our key strength when embarking on our ambitious plans. Subject to the outcome of the consultation process we look forward to welcoming the team and local community into the global GFG family on completion of the sale.”
"We want to develop the plant into an international centre of aluminium and downstream aluminium products expertise, demonstrating our GREENALUMINIUM strategy. This investment will help fulfil our ambitions in the sector, further enabling us to capitalise fully on expected growth in demand for aluminium over the coming years.
“In 2016 we acquired Rio Tinto’s Scottish operations, working in partnership with the Scottish Government, where are now building a high-value-added automotive components plant. We look forward to building an equally productive partnership with the French Government.
"This is GFG’s first significant step into continental Europe, which we will hope to build on. We are particularly attracted by the pro-business environment that President Macron’s France is quickly building. This has motivated our ambition to establish a global hub for the group in France, not only investing heavily in aluminium, steel and automotive, but also bringing our other divisions including energy, banking and property development to explore opportunities in France and Europe, also complementing and supporting Dunkerque,” Gupta added.
Alf Barrios, Rio Tinto’s chief executive Aluminium said: “The binding offer for the sale of Aluminium Dunkerque represents the best option for the future development of the site while also delivering value for Rio Tinto as we continue to streamline our portfolio. Liberty House has a track record of investing in similar assets, which should secure a long-term sustainable future for Aluminium Dunkerque and continued economic benefit for the wider community.”
Liberty acquired Rio Tinto’s aluminium smelter at Lochaber in Scotland in December 2016 and is currently investing £120 million ($162 million) to modernise and expand the plant, including the addition of an adjacent alloy wheels factory that will use primary aluminium made on site, creating around 400 direct jobs and a similar number in the supply chain and regional economy.
It is anticipated that the process will be completed and the sale concluded during the second quarter of 2018.
The GFG Alliance is being advised by a group of firms led by Lazard. – TradeArabia News Service