In the business year 2013/14, the Metal Engineering Division’s performance continued to be outstanding, driven primarily by a very positive development in the Rail Technology, Turnout Systems, and Tubulars business segments.
The Rail Technology business segment profited from a continuing good range of projects for heat treated special rails in Asia, South America, and Russia. It is expected that the cautious investment behavior of European rail operators in recent years will result in pent-up demand with regard to maintenance expenditures in the next few years. The closure of rail production in Duisburg was completed as scheduled in the business year 2013/14. This was the consequence of continuing competitive pressure in Europe in the standard rail segment, which led to ongoing losses.
Development in the Turnout Systems business segment was very satisfactory. South Africa, North America, and China were the main drivers of a high level of demand for turnouts made by the voestalpine Group. This demand compensated the declining activity in Australia, the result of declining investments by mine operators. It is particularly noteworthy that the growth segment Hytronics technology (propulsion, monitoring, and diagnosis systems) continued its trajectory of growth successfully in the past business year and expanded its business volume considerably.
The Tubulars business segment maintained its very good earnings level of recent years. The stable oil price of over USD 100 per barrel guaranteed continuing high investment activity by the oil and natural gas industries in North America and the Middle East, which are important regions for the Tubulars business segment. Even though competition is increasing in intensity in North America, the most significant market for OCTG (oil country tubular goods), voestalpine’s specialization in technologically sophisticated products for the oil and natural gas industries should continue to ensure stable, solid business performance. The increasing efforts in North America to become energy independent with a growing focus on more shale gas drilling and production also open up positive future prospects for the Tubulars business segment.
The significant upward trend in production by the European automobile industry, especially in the second half of the 2013 calendar year resulted in an improved order situation for high-quality products in the Wire Technology business segment, which is expected to continue in the business year 2014/15.
In the Welding Consumables business segment, there was no substantial stimulation of demand. Especially the weak market in Europe, particularly in the energy engineering industry, noticeably impacted business, although the fourth quarter of 2013/14 saw an upward trend. In contrast to Europe, the market environment in China, Southeast Asia, and the USA was somewhat more positive. Optimization measures and measures to simplify complex processes have been initiated and should have a beneficial effect on performance.