Following a period of consolidation after the major acquisition of BÖHLER UDDEHOLM and the effects of the financial and economic crisis, investment activity at the voestalpine Group has been markedly accelerating again since the business year 2012/13. This was necessary, on the one hand, to enhance the Group’s position as quality and technology leader and on the other hand, to advance the Group’s strategic orientation as a globally positioned, integrated technology and capital goods group.
In the first quarter of 2013/14, investments for the entire Group amounted to EUR 175.8 million, a figure that is 30.6% above the same quarter of the previous business year. While the Metal Forming Division reported only moderate additional investment in the same period (+12.2%), and the investments of the Metal Engineering Division hovered at about the same level as the previous year (–3.1%), the Steel Division showed a major increase (+42.4%), although even this figure was markedly eclipsed by investments in the Special Steel Division (+82.5%).
Specifically, the Steel Division’s investments in the first quarter of 2013/14, compared to the same period of the previous year, rose from EUR 51.9 million to EUR 73.9 million. The measures in the metallurgical segment primarily related to projects to increase efficiency in the blast furnace area (retooling the cowpers; installation of the new coal injection system). For rolling activities, several plans are currently underway concurrently. Work is currently being focused on the substructure of the new heavy plate rolling stand, which is scheduled for operational launch in December 2014. The continuous annealing line 2, for production of premium quality electric steel strip, is still being completed during this business year so that the ramp-up phase can start on schedule at the beginning of the business year 2014/15. In addition, investments are currently underway to modernize the tandem pickling cold rolling mill and the electrolytic galvanizing facility.
In percentage terms, the Special Steel Division achieved the most substantial expansion of investments in the first quarter of 2013/14 compared to the first quarter of the previous year. Though partially due to acquisitions, investment volume soared by 82.5%, from EUR 20.0 million to EUR 36.5 million. The most important undertakings are projects that have already been running for a long time: increase of capacity in the area of powder-metallurgical steels at the Kapfenberg (Austria) site and expansion of the steel plant at the Wetzlar (Germany) site. The latter project will span a total of more than four years and will add a whole new dimension to the plant in terms of productivity, quality, environmental protection, and occupational safety. The goal of numerous investments in the Value-Added Services segment is to facilitate the global expansion of the product range. Customers should not only be provided locally with steel, but also increasingly with qualitatively valuable services, such as heat treatment, pre-processing, and coating. The division’s most recent acquisition activities (Eifeler and Sturdell still in 2012/13 and Rieckermann in the previous quarter; see “Acquisitions”) are providing a considerable contribution to this undertaking.
In the Metal Engineering Division, the level of investment, totaling 31.3 million in the first quarter of the business year 2013/14 held steady in comparison to last year’s figure of EUR 32.3 million. The division successfully completed the construction of production facilities to manufacture ultra-high-tensile fine wire, as part of the acquisition of a majority stake in CPA Filament GmbH about one year ago. The new facilities were put into operation by the end of the first quarter of the current business year, as scheduled. Currently, the division is preparing initial sample deliveries to customers. A substantial portion of the Metal Engineering Division’s investment expenditures in the first quarter of 2013/14 were employed for a number of minor maintenance and restoration projects.
The Metal Forming Division laid out EUR 32.3 million for investments in the first quarter of 2013/14, which corresponds to a 12.2% increase over the previous year’s figure of EUR 28.8 million. Most of this amount was applied to investments in global support and facilitation of the expansion activities of strategically significant customers in the automotive sector and in the agricultural, and construction machinery sectors. The implementation of the high tensile strategy in the Automotive Body Parts business segment is proceeding according to plan, so that the new parts plant in the USA will be ready after the summer to commence production. The other new sites in China and South Africa will follow in the next nine months. The expansion of production facilities for special profiles in China are likewise proceeding on schedule. Meanwhile, in the Precision Strip business segment, the second phase of expansion was completed at the Kematen (Austria) site.