In order to ensure the leading position of the voestalpine Group both with regard to quality and technology and to implement its growth strategy, its investment activities in the first half of the business year 2014/15 remained at a continuously high level. At EUR 427.1 million, they matched the magnitude of last year’s investments (EUR 429.9 million) almost exactly. However, while the Steel and Special Steel Divisions (temporarily) reduced investment volume in the first six months of 2014/15, the other two divisions (Metal Engineering and Metal Forming Divisions) increased their investment expenditure in comparison to the previous year.
Investment activity in the Steel Division declined in the first half of 2014/15 by 16.3% from EUR 226.1 million to EUR 189.3 million. Current projects were focused on increasing efficiency of production processes and on continued improvement of the product portfolio. In accordance with the policy of consistent cost optimization in the liquid phase, installation of coal injection systems in all three blast furnaces in Linz, Austria, will be completed by the spring of 2015. Productivity improvement also includes the construction of the direct reduction plant in the USA, where all necessary permits and approvals have now been obtained; construction began in the early part of the second quarter. In the interest of continuing accelerated enhancement of product quality, initial measures have been taken to expand the capacity of the secondary metallurgy systems in the steel mill. The new facilities (vacuum system, ladle furnace) are expected to be ready in the fall of 2015. Construction of the new heavy plate rolling stand is already well underway; it is scheduled to start up operation in the 2015 calendar year.
In the first half of 2014/15, the Special Steel Division undertook investments totaling EUR 58.1 million, 22.3% less than in the same period of the previous year. The expertise in the high-tech coating of tools that was acquired by the takeover of the Eifeler Group in the business year 2012/13 is being gradually rolled out globally. As of the beginning of this business year, a new, coating facility that is appropriate for the operation’s needs was launched in Shanghai, China. On-site coating has now been added to the production of sophisticated special steel as well as its processing and heat treatment. Similar concepts are currently being realized at other locations (including Poland and Taiwan). In the Value-Added Services business segment, the range of service offerings was expanded during recent months as planned, thus solidifying and reinforcing the Group’s position as a global premium service provider in the toolmaking segment. For example, a new heat treatment facility in Düsseldorf, which has one of the largest blast furnaces worldwide, was put into operation. This investment enables voestalpine to provide the automotive industry with tool steel that is used for the forming of press-hardened steel plates. In Turkey, a new service center was opened in September 2014 near Istanbul; it will also provide heat treatment processes for this growth market.
The Metal Engineering Division laid out EUR 87.8 million for investments in the first half of 2014/15, which corresponds to an increase of 58.8% over the previous year’s figure of EUR 55.3 million. As far as magnitude is concerned, the largest single project is the construction of a new wire rod mill in Donawitz, Austria. This investment will enable the Wire business segment to differentiate itself even more significantly from its competition as far as quality is concerned. In the Rail business segment, a new walking beam furnace will be in place starting in the 2016 calendar year; it will enable both an increase of the throughput and a reduction in energy consumption. An interim repair of one of the two blast furnaces at the site in Donawitz, Austria, was performed in the spring of 2014; this work was carried out as scheduled without impacting customers (advance production and external sourcing of materials).
In the Metal Forming Division, at EUR 88.1 million, investments in the first six months of the current business year were 25.3% above the previous year’s level (EUR 70.3 million). As was the case in the past business year, focus is on consistent implementation of the internationalization strategy in the segment of automotive components made of press-hardening steel (“phs-ultraform”) based on new technology. In the Automotive Body Parts business segment, new production sites in the USA, South Africa, and China have been successfully launched. The production speed of press-hardened components in Germany was optimized by using new approaches to better supply the quantities required by automotive customers. Another project focused on “phs-ultraform” is currently being planned for Shenyang, a new location in China. In the Tubes & Sections business segment, a new plant was also put into operation in China; it is geared to producing special sections for the construction machinery and agricultural machinery industries.