Flacks Group is revising its bid to acquire troubled Italian steelmaker Acciaierie d’Italia (ADI) and intends to establish a new company, with hopes of the Italian government taking a stake, ceo Michael Flacks confirms to Kallanish.
The new company, named Flacksider, intends to guarantee production continuity at the Taranto steelworks, build a direct reduced iron plant on-site to feed new electric arc furnaces (EAF), and gradually phase out the existing blast furnaces. Flacks expresses frustration at the length of Italian bureaucratic processes and the slow pace of government decision-making.
His intention is to progressively re-employ all direct workers while also relaunching activity for indirect workers and contractors. Flacks says he expects a government response to his proposal but notes that the summer holiday period is slowing the process as the sector approaches its complete August shutdown.
In response to the rival bid by Jindal Steel International, Flacks says the Indian company intends to turn Taranto into a re-rolling facility, with redundancies for the majority of workers and decarbonisation achieved by effectively shutting down the blast furnaces and heavily relying on semi-finished product imports from outside the European Union.
“I am so sorry for all the workers who would effectively lose their job,” he says, adding that his own project would gradually reinstate workers and production, with any workforce reduction being only temporary. Flacks forecasts annual output of 4 million tonnes of green steel at full capacity.
Flacks previously spoke of talks with Metinvest and Italian equipment maker Danieli as possible partners. Danieli confirmed its involvement to Kallanish while Metinvest did not comment publicly. Sources believe both companies could be involved in the new company, Flacksider.
Earlier this year Flacks created a technical committee to update its existing industrial plan for ADI’s relaunch.
Meanwhile, the Italian government is said to be in advanced talks with Jindal Steel for leasing ADI. The proposal submitted by Jindal would focus mainly on downstream re-rolling activity. Taranto’s production would heavily rely on imported slabs, which Jindal would supply from a future green steel complex in Oman. Decarbonisation of the site would be achieved through the shutdown of primary steelmaking (see Kallanish passim).
