Liberty Magona Resumes Production with HRC from Galati in Romania
Local media reported that in Piombino Italy based Liberty Magona has resumed production activities on 23 August 2021 after arrival of HR coils from the Liberty Steel plant in Galati in Romania. The painting and galvanizing lines were the first to be restarted. The transition to full production in Piombino will be completed in September. From this month onwards, Galati should provide Magona 60-70% of its needs.
Liberty Magona, which employs about 500 employees, had had to stop for about two months, putting the staff on layoffs, due to the lack of input materials. ArcelorMittal, from whom Liberty Steel acquired several European assets, including Magona, in order for the former to complete the purchase of Ilva in 2019, had committed supply to those assets under the divestment deal. But when Liberty ran into financial difficulties this year, and as other customers were looking for more material, ArcelorMittal reduced supply to those plants. Reportedly, payments from other Liberty assets to ArcelorMittal stopped, so the latter halted deliveries to the other sites, including Magona.
The supply problem was linked to the financial problems suffered by the group lead by Mr Sanjeev Gupta since March this year, when major lender Greensill Capital collapsed. To overcome these issues, the Galati plant was made the main supplier of raw materials to Liberty Steel's European processing plants.
According to old records, the Magona asset has capacity for 800,000 tonnes per year of galvanised and pre-painted steel but it has been producing below capacity for years. Its output is destined for use in the automotive, construction, household appliances and industrial sectors. LIBERTY Steel Group celebrated the restart of LIBERTY Magona’s Pickling Line and the completion of the restart work for the plant’s Organic Coated Line No1 in July 2020. The EUR 10 million investments had led to a 40% increase in production capacity. The EUR 5 million program was to restart the Pickling line, which can produce more than 800ktpa of prepared steel and LIBERTY Magona was in the process of restarting its Organic Coated line 1, which has been mothballed since 2009. The additional EUR 5 million investments in the OC1 line was to almost double production of LIBERTY Magona’s organic coated product