Investments

In the past business year, the voestalpine Group invested a total of EUR 1,177.8 million, an increase of 25.8% compared to the same period in the previous year, which saw investment expenditure at EUR 936.0 million. Expenditure in the individual divisions was as follows: Steel Division at EUR 570.6 million (2013/14: EUR 447.4 million), Special Steel Division at EUR 159.3 million (2013/14: EUR 181.8 million), Metal Engineering Division at EUR 269.0 million (2013/14: EUR 164.2 million), and Metal Forming Division at EUR 169.8 million (2013/14: EUR 130.6 million). Of the total amount of EUR 1,177.8 million, 96.5% (EUR 1,136.8 million) were attributable to investments and 3.5% (EUR 41.0 million) to acquisitions.

The Steel Division’s investment projects extended along the entire value chain, from the metallurgical sector to rolling mills, in order to continue to enhance its pioneering role in technology in Europe on one hand and to bolster efficiency and cost structure on the other. The largest current project as far as volume is concerned is the construction of the direct reduction plant in Corpus Christi, Texas, USA, which will be the largest and most modern plant of its kind. Construction began in June 2014 immediately after the successful completion of the environmental impact assessment and once all the necessary official permits had been obtained. The port facilities have now almost been completed and construction of the main plant, the 137-meter-high reduction tower, is expected to be finished at the end of the 2015 calendar year. Then supply of the Austrian steel sites Linz and Donawitz as well as a number of external customers with high-quality pre-material for steel production (hot briquetted iron/sponge iron) can begin. Another step to optimize the use of reducing agents was completed toward the end of the business year 2014/15; coal injection systems were installed in all three blast furnaces in Linz. In the steelworks segment, construction of continuous casting plant 8 and secondary metallurgy system 4 (commissioning scheduled for the fall of 2015) was contracted and work was begun; these projects are important in the quest to continue to improve the product mix. In the past business year, the most important projects in the rolling mill segment were the modernization of the pickling-tandem line in cold-rolling mill 2 and of hot-dip galvanizing plant 2 as well as construction of a new heavy plate rolling stand (commissioning scheduled for the fall of 2015).

In the past business year, the Special Steel Division also expanded its leading role with regard to technology and quality in its product segments by undertaking a large number of investments, in the areas of both production and sales. For example, at the site in Hagfors, Sweden, another electro-slag remelting facility was acquired for the production of high-quality tool steel. At Villares Metals S.A., Brazil, considerable new investments were made in the wire production, while at Böhler Edelstahl GmbH & Co KG at the site in Kapfenberg, Austria, new facilities for the processing of bright steel were commissioned. As part of the consistent implementation of voestalpine’s value-added strategy, new centers for the high-tech coating (PVD coating) of tools based on the technology developed by the German Eifeler Group, which was acquired in 2013, were built in the sales sector in Shanghai, China, and in Taiwan. The past business year also saw significant expansion of heat treatment of tool steel at a number of sites; this is a step that is upstream of the coating segment. The new service center near Istanbul, Turkey, which is situated in direct proximity to a number of existing customers, not only sells special steel but also has a hardening facility for tool steel. In the fourth quarter of 2014/15, the Special Steel Division opened its third site in Mexico, a sales company in Puebla, which will primarily meet the demands of the automotive industry that continues to grow.

In the business year 2014/15, the Metal Engineering Division optimized the liquid phase by modernizing a ladle furnace and renovating both converters at the Donawitz, Austria, site, thus creating important prerequisites to be able to supply its own processing sectors with high-quality pre-material in the future as well. As part of its effort to differentiate itself even more from the competition as far as quality is concerned, the Wire business segment is building a completely new, state-of-the-art wire rod mill (including a walking beam furnace) at the same site in order to be able to provide its customers with even better service than before in the segment of rolled cold heading and bearing wire. The facility will begin production in the early part of the 2016 calendar year. The Rail business segment in this division will also be getting a new walking beam furnace in order to enable it to implement the production of new rail grades in a technologically optimal way.

In the Automotive Body Parts business segment, the Metal Forming Division invested in the construction of new “phs” lines at the sites in Schmölln and Schwäbisch Gmünd, Germany, in order to provide its automotive customers even more comprehensively with components made of press-hardening ultra high-strength steel based on new technology. Furthermore, as of the beginning of the business year under review, additional new production sites for sophisticated body-in-white components went live; they are situated in the proximity of famed automobile manufacturers in the USA, South Africa, and China. The sites in the USA and China will continue to be upgraded and expanded as far as technology is concerned in the coming years. With the new “phs” facilities in Germany that were powered up in the third quarter, there are now six such facilities in operation as of the end of the business year. In the Tubes & Sections business segment, the run-up phase began at a new plant in Suzhou, China, at the beginning of the business year; it specializes in the production of special sections for the construction machinery and agricultural machinery industries.