Capital increase to expand the employee participation plan
On March 6, 2017, the Management Board of voestalpine AG resolved to increase the Company’s share capital by around 0.8% by issuing 1.4 million no-par value bearer shares to expand and safeguard voestalpine AG’s employee participation plan. The capital increase was recorded in the Commercial Register on March 30, 2017. The share capital of voestalpine AG now amounts to EUR 320,394,836.99, divided into 176,349,163 shares/no-par value shares. With this capital increase, the shares held by the voestalpine Mitarbeiterbeteiligung Privatstiftung (including private shares) on behalf of the employees participating in the plan account for 14.8% of the share capital of voestalpine AG.
Direct reduction plant Texas, USA
After the official groundbreaking for the construction of the largest direct reduction plant worldwide in Corpus Christi, Texas, USA, three years ago in April 2014, the plant went into full operation on April 1, 2017, and will be producing two million tons of high quality HBI (hot briquetted iron) per year. The porous sponge iron, which, for easier transport, is pressed into briquettes, is a high quality, relatively environmentally friendly ferrous material for use in steel production, both in blast furnace routes and electric furnaces. HBI is derived by reducing iron ore using natural gas instead of coke as with traditional blast furnaces. The use of the US-produced HBI in the voestalpine blast furnaces and steel shops broadens the raw material base and offers significantly more flexibility in that regard, lowers the energy footprint, reduces the site-specific CO2 emissions by up to 5%, and provides technological options with regard to decarbonizing the steel production. Furthermore, with its heat recovery system, recycling of process gases and enclosed conveyors and ore deposits, the plant in Corpus Christi also sets new environmental standards.
The deep-sea port with loading and unloading cranes and the centerpiece of the investment–the 450-foot-high reduction tower–were successfully completed during the business year 2015/16. After a nearly two-and-a-half-year construction phase, the world’s largest and most sophisticated plant of its kind was officially opened on October 26, 2016, following a successful start-up over the course of the previous month. Since stable operations at a high performance level were established at the new plant within only six months and the final performance test was successfully completed in March 2017, the facility moved into continuous operation at the beginning of the business year 2017/18. Not only were the targeted operating parameters achieved in technological terms after a relatively short period of time, the plant even managed to surpass the rather ambitious product quality specifications. Continuous supply of HBI from Texas to customers in the NAFTA region and Europe as well as to the domestic steel sites in Linz and Leoben/Donawitz in Austria began toward the end of the calendar year 2016. In the business year 2017/18, the plant should already reach its annual nominal capacity of 2 million tons, and, with that, promises a clearly positive earnings contribution in only its first year of full operation. voestalpine Texas LLC has around 190 employees at the Corpus Christi location.
As already stated in various other publications, the project involved rather substantial cost increases due to extremely difficult weather conditions in the first phase causing delays, a considerable spike in building materials and labor costs because of a construction boom in Texas that began in 2014 and was not foreseeable at the time of the project decision in 2012, and due to additional investments and technical optimization measures (warehouse concept changes). With the completion of the start-up process, the total costs of the project amount to USD 1,012 million and exceed the originally budgeted USD 742 million (a priori calculated in USD) by about one-third. In terms of the strategic importance of this project, these cost increases do not make any difference, and, from today’s viewpoint, the still viable economic attractiveness of the project is confirmed by the impairment test results in the recent annual financial statements.
Corporate Governance Report
The Corporate Governance Report for the business year 2016/17 was published on the voestalpine AG website under the heading “Investors.”
- The full link is