While in the interest of a progressive reduction of debt, the investments of the past years were characterized by a restriction of expenses to approximately the level of depreciation, the investment activities at the voestalpine Group again became significantly more dynamic after the gearing ratio fell below 50% in the business year under review.
At EUR 851.5 million (previous year: EUR 574.6 million), investments in 2012/13—for the first time since the business year 2008/09—were markedly above the level of depreciation (depreciation in the business year 2012/13: EUR 588.2 million). These investments dealt with required repair and maintenance measures, such as the relining of a blast furnace in the Metal Engineering Division; however, they primarily involved plans that consistently promoted the further enhancement of the Group’s leadership in technology and quality, and at the same time advanced the Group’s regional diversification outside of Europe. The investment activities of the individual divisions in the business year 2012/13 can be illustrated in detail as follows:
At EUR 277.3 million, the Steel Division accounted for almost one-third of the Group’s investment expenditures in the business year 2012/13 (previous year: EUR 197.8 million or +40.2%). At the center of these activities were the final measures of “L6,” the major investment program, which has been ongoing since 2009, supplemented by necessary replacement and maintenance investments. After the operational launch of the DeNOX system on the sintering belt toward the end of 2012, the start-up of the continuous annealing line 2 (investment volume of EUR 150 million) will mark the completion of the “L6” program. At that point, the Steel Division will possess the most modern installation currently available in the world for the production of electric steel strip.
The next investment program, “Linz 2020,” will serve to secure the Group’s leadership in technology and quality over the long term and also facilitate cost and product mix optimization. Critical components of the project entail the relining of all three blast furnaces, including the installation of pulverized coal injection (“PCI”) systems, the expansion of secondary metallurgical capacities to 80% of the steel mill’s capacity, and the updating of the slab processing systems. Under this program, an expansion of steel production capacity at the Linz site to more than 6 million tons is not being planned. In heavy plate production, the new construction of the rolling stands is currently underway as scheduled. In connection with a new rolling technology, it will be possible to develop new product qualities in this segment.
In the business year 2012/13, the Special Steel Division invested a total of EUR 257.2 million, thereby doubling the previous year’s figure of EUR 128.7 million. Among the most significant investments is the expansion of capacities at the Kapfenberg site for the production of powder-metallurgical steel. Execution of the steel mill redesign at the Wetzlar (Germany) site is running right on schedule. In this endeavor, the division intensified its focus on productivity, quality, environmental protection, and job security as part of an expansion program slated to run for four years. In the division’s international service and sales network, the Group is consistently investing in the expansion of pre-processing and processing activities. In this regard, the focus was on Canada, China, and Germany in the year under review. Thus, the Special Steel Division not only aimed to extend the value creation chain, it also strived for a significant strengthening of its own position in customer service.
The investments of the Metal Engineering Division in the business year 2012/13 equaled EUR 164.9 million, which exceeds the previous year’s figure (EUR 129.3 million) by approximately 27.5%. The most comprehensive project, in terms of cost, involved the relining of one of the two blast furnaces at the Donawitz site. In the wire segment, construction continued and was nearly completed on a production facility for the manufacture of ultra-high-tensile fine wire at CPA Filament GmbH, a unit that was taken over approximately one year ago through the acquisition of a majority stake. The company is currently beginning the run-up phase (see also the “” chapter).
In addition to an array of smaller projects that are being implemented on schedule, a representative example of one such project is the installation of comprehensive laboratory and test devices for the quality control testing of seamless tubes at the Kindberg (Austria) site.
In the business year 2012/13, the Metal Forming Division’s investment expenditure soared by 30% compared to the previous year, from EUR 109.8 million to EUR 142.6 million. The groundbreaking ceremony for the construction of a plant to produce automotive parts in Cartersville, Georgia (USA) took place in mid-November 2012 with production slated to begin in the first half of business year 2013/14. As part of the accelerated internationalization of the Automotive Body Parts business segment, new production sites are also being constructed in South Africa and China. Also in China, the contract to install a special section production facility (customer focus: construction and agricultural machinery) was awarded in the third quarter of the business year 2012/13. In the Precision Strip business segment, the investments in a new rolling and strip processing center at the Kematen (Austria) site were largely completed.