In the first quarter of the business year 2014/15, investment activity of the voestalpine Group remained at a very high level; at EUR 184.4 million, it was even 5.4% higher than the previous year’s figure of EUR 175.0 million. With the exception of the Special Steel Division, investment volume grew in all divisions. Percentage-wise, the Metal Forming Division saw the strongest expansion due to its accelerated internationalization strategy.
In the first quarter of 2014/15, the investments undertaken by the Steel Division increased by 12.4% from EUR 73.9 million in the previous year to EUR 83.1 million. The Steel Division’s projects concentrated on cost optimization in the production process and on the improvement of its product mix. Important projects with regard to the improvement of cost efficiency were the installation of coal injection systems in all three blast furnaces in Linz, Austria, as well as the construction of a direct reduction plant in Texas, USA. While the work on the coal injection systems is already at an advanced stage (commissioning is expected for the fall of 2014), construction of the direct reduction plant is currently starting, now that the permit and approval procedures and preliminary work have been successfully completed. With regard to further quality improvement of the Steel Division’s product portfolio, the following two projects should be especially highlighted: completion of the continuous annealing line II – “Kontiglühe II” – (production of electrical sheet steel) in the early part of the business year and the construction of a new heavy plate rolling stand, which is scheduled for operational launch in the first half of the 2015 calendar year.
The Special Steel Division’s investments in the first three months of the 2014/15 business year equaled EUR 25.8 million, which places them 29.3% under the level of the previous year (EUR 36.5 million). In Shanghai, China, another coating center (a greenfield project) was put into operation at the beginning of the business year, another step in the international growth of the Value-Added Services business segment. For the Eifeler Group, which specializes in top-quality, innovative coatings for components, this is already the second site expansion after its takeover by voestalpine in the business year 2012/13; the same coating technology has been already successfully implemented in Canada last year. Furthermore, in other strategic sales regions of the Special Steel Division, ongoing investments are being made specifically in the expansion of service activities, such as heat treatment, pre-processing, and coating.
At EUR 33.7 million, the Metal Engineering Division’s investments in the first quarter of 2014/15 were 10.5% higher than the previous year’s figure (EUR 30.5 million). The investment in a new wire rod mill at the Donawitz site in Austria, is currently its most important project. Construction is on schedule, and the first wire coils will be produced in the spring of 2016 at what will then be the most modern plant of this type in Europe. In addition to the construction of the rolling mill, a new walking beam furnace will be built. A new walking beam furnace will also be in use in the future in the Rail Technology business segment; it fulfills the toughest requirements as far as energy efficiency is concerned and furthermore, it will enable yet another improvement in product quality.
With an increase of 24.5% from EUR 32.3 million to EUR 40.2 million, the Metal Forming Division saw the greatest rise in investment activity percentage-wise within the voestalpine Group, with investments being focused on an accelerated implementation of the internationalization strategy. In China, investments in the Tubes & Sections business segment and in the Automotive business segment were completed on schedule, and the facilities are currently in the run-up phase. Another project focused on the new product segment “phs-ultraform” is in the preparatory phase at the Shenyang site in China. The new facilities that will deliver components to automotive customers in the USA and South Africa are also on schedule and in the run-up phase.