After a phase of reduced investment activity that spanned several years, the voestalpine Group intends to expand these activities in the current business year. The first quarter of 2012/13 already showed growth in this area compared to the same period of the previous year, with investments rising by 15.0% from EUR 117.0 million to EUR 134.6 million, due to higher expenditures in the Special Steel Division (by more than 60%) and the Metal Engineering Division (by more than 50%).
Investment expenditures in the Steel Division, on the other hand, fell by 6.3% from EUR 55.4 million to EUR 51.9 million, largely as a result of the fact that the extensive investment program “L6” had been completed by the end of the previous business year. The main current investment projects are the continuous annealing line, which is being implemented on schedule, as well as investments to replace legacy equipment in the LD steel plant. Additionally, investment expenditures for blast furnace replacement equipment and expansion have been approved but are still in the planning phase; the primary focus of these projects will be the replacement of the cowpers and a new coal injection system.
In the heavy plate segment, construction of a new pusher-type furnace will be completed shortly; at the same time, construction of a new roll stand is just getting off the ground. In May 2012, equipment was installed in the new Steel Service Center in Giurgiu, Romania, so that production was able to begin on schedule in June.
The Special Steel Division reported the most significant increase in investment expenditures by 61.3%. At EUR 20.0 million, its expenditures were almost two thirds higher than those of the previous year (EUR 12.4 million). Investments in the current business year will be focused on completion of the expansion of production capacity for powder-metallurgical steels at the Kapfenberg (Austria) site as well as on the new concept for the special steel plant in Wetzlar (Germany), where a four-year investment program is planned to comprehensively improve not only productivity and quality, but also environmental protection and occupational safety. Expansions and additions in the division’s sales companies are currently on schedule in the pre-processing and heat treatment segments as well as with regard to sawing capacity in order to advance our long-term, strategic focus on a consistent improvement along the entire value chain and a continuing enhancement of the service quality.
With a plus of 52.4%, the Metal Engineering Division also recorded a significant rise in its investments compared to the first quarter of the previous year, going from EUR 21.2 million to EUR 32.3 million. The main focus was on preparations for the lining of a blast furnace in Donawitz, which will be completed by the fall of 2012. In order to be able to fill customer demands over the summer despite this complex project that will run for several months, a build-up of reserves of pre-materials (billets and blooms for the processing of steel to rails, turnouts, wire, and seamless tubes) began in the first quarter of 2012/13.
At 28.8 million, investments in the Metal Forming Division were 10.3% above those in the same period of the previous year (EUR 26.1 million). Driven by customer demand, the focus is on the expansion of production capacity in the growth markets and the technologically demanding product segments. In the first quarter of 2012/13, construction of the site for production of special sections in the vicinity of Shanghai began; production launch is planned for the business year 2013/14. Additionally, a production facility for the forming of phs-ultraform® steel in Schmölln, Germany is also being built. The international expansion of the Automotive Body Parts business segment is also proceeding on schedule at several already existing Group locations outside of Europe.
Despite the increases described herein, investment expenditures of the voestalpine Group in the first quarter of the business year 2012/13 are still slightly under the level of depreciation, which has remained practically unchanged compared to the previous year.