For the voestalpine Group, the close of the business year 2021/22 constitutes the end of a three-year phase during which investments in property, plant, and equipment; intangible assets; and equity interests fell significantly short of current depreciation. This approach was designed to enable necessary replacement investments and to optimize existing plants and facilities. Projects serving to ensure the Group’s quality and technology leadership were also initiated during this consolidation phase. For example, the construction of the new special steel plant in Kapfenberg, Austria, is a cutting-edge project that has already progressed very far. Reducing investments for a time also served to better evaluate and plan future projects. Going forward, voestalpine will once again train its focus on highly profitable growth projects in its processing divisions. In particular, this will also entail paying close attention to the implementation of the technological transformation at the Group’s steel production facilities in Linz and Donawitz (both Austria). Accordingly, in March 2022 the Supervisory Board of voestalpine AG approved initial substantive steps regarding the technological switch from the coal-based blast furnace route to the green electricity-based electric arc furnace route. On the whole, the voestalpine Group’s investments during the reporting period come to EUR 709.9 million, up 16.0% on the previous business year’s level of EUR 612.1 million.
At EUR 246.3 million, the Steel Division boosted its investment volume in the business year 2021/22 by 59.0% compared with a mere EUR 154.9 million in the business year 2020/21. In early October 2021, the division held the groundbreaking ceremony for the construction of a fully automated pickling line with tandem cold mill (Beta 3) that is budgeted at EUR 188 million. This launched the implementation phase of the division’s largest investment project in recent years. The construction of the factory floor, where the new state-of-the-art pickling line will be located, has already begun. Beta 3 will set new benchmarks for both the digital transformation of processes and sustainability. In addition, the facility will also make important contributions to product quality, specifically, in connection with the production of high and highest tensile steel for the automotive, white goods, and construction industries as well as the production of electrical steel strip for e-mobility applications. Beta 3 is slated to have a manufacturing capacity of about two million tons and will probably be started up at the end of calendar year 2023. The refitting of the hot-dip galvanizing lines at the Linz plant serves the same goal, namely, improving the product mix. The existing facilities are being retrofitted so that the division can respond to the growing demand for high-tensile steel. As the plans call for limited production shutdowns in order to avoid jeopardizing current operations, the upgrades of the hot-dip galvanizing lines will not be completed before calendar year 2027. During the business year ended, voestalpine also set the stage for climate-friendly steel production in the long term. Pursuant to the aforementioned Supervisory Board resolution, work to clear the future construction site and carry out infrastructure measures will commence in the Northern summer of 2022. In calendar year 2023, the Supervisory Board will make a final decision whether to invest in an electric arc furnace to replace a blast furnace.
At EUR 211.5 million, the investment expenditure of the High Performance Metals Division in the business year 2021/22 is 3.6% lower than the EUR 219.3 million it spent in the previous business year. This decline is also related to the construction of the new special steel plant in Kapfenberg—the voestalpine Group’s largest investment project in recent years. The investment expenditure for the plant in the reporting period was much lower year over year. In the business year 2021/22, key implementation steps concerned the detail engineering for the supply of media and electrical power to the melting facility. The cold start-up work was launched once the casting facility was finalized. Initial smelting tests will be conducted upon completion of a detailed inspection of the new plant, including component and component group integration tests. The start-up is slated for the Northern summer of 2022. An electroslag remelting (ESR) facility was commissioned at the production site of Villares Metals in Sumaré, Brazil, during the reporting period. The growing demand for high quality special steel grades underscores the economic viability of this investment. Villares Metals also invested in the expansion of service centers at several of its facilities in Brazil.
At EUR 127.2 million, the investments of the Metal Engineering Division during the business year 2021/22 were 1.9% lower year over year (2020/21: EUR 129.6 million). The successful start-up of continuous casting plant 4 (CC4) in Donawitz brought the division’s larger investment projects to a close for the time being. In the business year ended, the focus was on modest replacement investments and/or projects serving to boost efficiency and productivity. For example, the tubulars product segment invested in a multi-purpose finishing line at the facility in Kindberg, Austria. Preparations for the comprehensive overhaul of the rotary hearth furnace were launched at the same site. In the future, this division will increasingly focus its investments on projects involving metallurgical transformation.
The investment expenditure of the Metal Forming Division in the business year 2021/22 was EUR 130.2 million, up 30.5% from EUR 99.8 million in the business year 2020/21. Highly specific growth projects were brought to fruition in the Automotive Components business unit. The start-up of the fourth phs line that is used to form press-hardened steel at the division’s facility in Shenyang, China, during the reporting period is but one example. Another plant of the same type is being built in Shenyang and will likely be operational in the business year 2022/23. The Tubes & Sections business segment invested in both roll forming and welding facilities at various sites in order to strengthen its position as a technological pioneer and to respond to additional customer needs. The Precision Strip business segment focused mainly on replacement and maintenance investments. In the coming years, the Metal Forming Division will once again train its focus on trailblazing growth projects.