FerroGlobe Resources Group — Expansion Strategy & Phased Roadmap
The phased expansion strategy across trading scale-up, vertical integration and the greenfield mill, and the geographic roadmap across the continent.
Section 7 · Business Plan
Expansion Strategy & Phased Roadmap
The phased expansion strategy across trading scale-up, vertical integration and the greenfield mill, and the geographic roadmap across the continent.
7.1 Three-Phase Approach
FGRG’s expansion strategy unfolds across three carefully sequenced
phases over seven years. Each phase is engineered to be self-funding (or
at least cashflow-supportive) before progressing to the next, minimising
execution and capital-structure risk. The three phases are summarised
below and detailed in the implementation roadmap (Section 13).
| Phase | Period | Theme | Key activities & milestones |
|---|---|---|---|
| PHASE 1 | Years 1–2 | Trade Scale-Up | • Establish HQ (Johannesburg) + trading desks (Dubai, Mumbai, Lusaka) • Build first 50 supplier relationships and 10 anchor offtake agreements • Scale trading volume from 0.5 Mt (Y1) to 1.5 Mt (Y2) • Equity Tranche 1 + senior debt Tranche 1 closed |
| PHASE 2 | Years 2–5 | Vertical Integration | • Acquire 1 brownfield rolling mill (Southern Africa) • Acquire 2 service centres (East + West Africa) • Develop scrap aggregation network (3 hubs) • Trading volume scales to 4.2 Mt (Y5) • Capital Tranche 2 (debt + mezzanine) closed |
| PHASE 3 | Years 4–7 | Industrial & Energy | • Construct 1 Mtpa greenfield mill (commissioning Y7) • Roll out solar + wheeled energy capacity (200 MWp by Y7) • Launch proprietary shipping arm (2 vessels) • Pre-IPO restructuring (Y6–Y7) |
7.2 Phase 1 — Trade Scale-Up (Years 1–2)
The objective of Phase 1 is to establish a credible, scalable trading
business that generates positive operating cashflow by Year 2. Capital
deployment in this phase is approximately USD 215 million — the lightest
of the three phases — concentrated in working capital, trading-desk
infrastructure, treasury and trade-finance capabilities, and corporate
set-up costs.
Key milestones — Phase 1
- Q1 Y1: Financial close on equity Tranche 1 (USD 150M) and senior
debt Tranche 1 (USD 100M) - Q1 Y1: Johannesburg HQ established, regulatory licences in place,
audit firm appointed - Q2 Y1: Dubai trading desk open and operational
- Q3 Y1: Mumbai procurement desk and Lusaka regional office
operational - Q4 Y1: First 25 supplier framework agreements signed; first 5
anchor offtake agreements - Q4 Y2: Trading volume ramps to 1.4 Mt run-rate; positive
operating cashflow achieved
7.3 Phase 2 — Vertical Integration (Years 2–5)
Phase 2 layers asset-based capability onto the trading franchise. The
first acquisition is a brownfield rolling mill — targeting 0.4 Mtpa of
long-products capacity in Southern Africa — at a target enterprise value
of USD 140 million. Two service centres follow, one in East Africa
(Tanzania or Kenya) and one in West Africa (Nigeria or Ghana), at USD
35–40 million each, providing downstream cutting, slitting and
galvanising. A scrap aggregation network is developed in parallel,
comprising three regional hubs that secure scrap inputs for both trading
and own-production.
Key milestones — Phase 2
- Y2 Q3: Brownfield rolling mill identified, due-diligence
commenced - Y3 Q1: Rolling mill acquisition completed; integration plan
executed - Y3 Q3: First service centre operational (East Africa)
- Y4 Q1: Second service centre operational (West Africa)
- Y4 Q2: Capital Tranche 2 closed (USD 200M debt + USD 75M
mezzanine) - Y5 Q4: Scrap aggregation network operational across three
hubs
7.4 Phase 3 — Industrial & Energy Expansion (Years 4–7)
Phase 3 delivers the Company’s transformational growth: a
1-million-tonne greenfield mill, integrated renewable-energy capacity,
and a proprietary shipping arm. The greenfield mill is the largest
single investment in the plan at USD 220 million, comprising EAF-based
steelmaking (electric arc furnace), continuous casting, and a
long-products rolling line with optionality for future flat addition.
Site selection prioritises proximity to scrap supply, deep-water port
access, and renewable-energy availability — with two final candidates
currently under evaluation in South Africa and Mozambique.
Key milestones — Phase 3
- Y4 Q2: Greenfield mill site finalised and feasibility study
completed - Y5 Q2: All permits secured; EPC contract signed; construction
begins - Y6 Q4: Solar capacity (100 MWp) commissioned
- Y7 Q1: Greenfield mill mechanical completion
- Y7 Q2: Greenfield mill first hot metal — commissioning
underway - Y7 Q3: Greenfield mill commercial production begins (60%
utilisation Year 7) - Y7 Q4: Pre-IPO corporate restructuring complete
7.5 Strategic Optionality
Beyond the base plan, FGRG retains several strategic options that may
be exercised opportunistically: (i) acquisition of a second brownfield
mill if a distressed asset becomes available below replacement cost;
(ii) downstream integration into pre-fabricated steel structures
(high-margin specialty); (iii) joint venture with a Chinese, Indian or
Turkish mill for a backward-integrated steelmaking partnership; and (iv)
a pan-African distribution roll-up acquiring three to five regional
stockists. These options are not capitalised in the base case but
represent meaningful upside.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of FerroGlobe Resources Group (Pty) Ltd.