Liberty House, the UK metals group owned by Sanjeev Gupta, plans to convert struggling ABG Shipyard into a steel plant if his bid to take over the Indian facility succeeds.
Liberty House has emerged as the sole bidder for the Ahmedabad-based yard with local authorities now assessing the bid. Gupta’s plans are to convert the shipyard into a site to recycle ships and scrap metal.
Speaking with local news site Livemint, Gupta said, “ABG is a junkyard. It has been vandalised and now you will only find stray dogs there. The shipbuilding business is not something we’re planning on. The yard is well-located; it’s got a good shiplift. It can be used for breaking ships for scrap and that serves our green steel (recycled steel) objective. The business model we have in mind is completely different. ABG is a difficult asset and we are looking at the long-term play of making it into a steel plant. Building ships is not a viable business here, that’s why shipyards are in the doldrums in India.”
The ABG conversion would come at a signicant moment for the ship recycling industry. China, where in dock recycling is the norm, is banning foreign ships for ship recycling from the end of this year, leaving a significant shortfall in available sites for green scrapping.
