Contractors supplying services to Whyalla's steelworks are encountering financial challenges as they have not received payments from GFG Alliance, with some owed amounts exceeding $150,000. There are concerns that if the situation does not improve, these businesses may have to lay off staff or contemplate liquidation. Despite the severity of the situation, suppliers are hesitant to speak out publicly, fearing potential repercussions on their relationship with the prominent company in the town.
An email has been shared among Whyalla's business community, signaling alarm about the uncertain future due to a lack of orders and delayed payments from GFG Alliance. This email suggests a coordinated action within the community in preparation for potential crises reminiscent of the past challenges faced by the steel industry in the region. GFG Alliance acknowledges the global steel industry is experiencing a downturn, leading to reduced demand and significant pressure from international suppliers, and assures its commitment to the long-term sustainability and transformation of the Whyalla operations.
The challenges faced by GFG Alliance extend beyond Whyalla, with reports of financial troubles in its European operations including a steel mill bankruptcy in the Czech Republic. Furthermore, the steel market downturn is influenced by weakening demand in China, resulting in a substantial drop in steel prices. As the financial strain persists, the Small Business Commissioner SA urges businesses grappling with delayed payments to seek support from their office to navigate through the difficulties effectively.