10 years of innovation and technology: new capacities in flat production. Enrico Paladini, Marcegaglia coil division

Transcription

1 10 years of innovation and technology: new capacities in flat production Enrico Paladini, Marcegaglia coil division

2 Good afternoon. My name is Enrico Paladini, sales director of Marcegaglia coil division 2

3 Marcegaglia coil processing plants have been developed through the years within a huge complex in the harbor of Ravenna, on the Adriatic Sea. Here we started a massive campaign of investments across 10 years that has taken us much further in the production of flats. 3

4 The plant started its first upgrades at the beginning of the century. Until then, the activity was based mostly on 1 pickling line started in 1994 and 1 galvanizing line started in

5 Then we launched the Ravenna 2000 project: we set up the first cold-rolling plant with 1,5 million tonnes yearly capacity; we added annealing furnaces and the skinpass line; and we also invested in the first pre-painting line for organic coating, inaugurating the works in

6 By the middle of the decade, Marcegaglia decided two important new additions: A new pickling line with 1,5 million tonnes capacity And a second hot-dip galvanizing line, for 330 thousand tonnes additional capacity. 6

7 And we come to the most recent investments: within the last 3 years we saw the starting of a second cold rolling unit six-high, and a third cold rolling line reversible two-stands, four-high, for a total 730 thousand tonnes added capacity 7

8 a combined galvanizing and pre-painting line, where the two parts can work independently for maximum coating flexibility; and an additional galvanizing line, bringing the total zinc coating lines to 4 and the capacity to almost 2 million tonnes 8

9 In addition to that, we can say that Ravenna is also our main logistic centre. This is because here we have a huge facility for receiving, storing and shipping coils This area was also massively upgraded during the years, and now we can benefit from 700 metres of harbor docks, privately owned and managed, finished with state-of-the-art concrete floor and coil cradles 9

10 served by 5 cranes and an internal railway line. in the area we can say that 3,5 million tonnes of steel material are moved each year. 10

11 Now let s see where such investments have taken Marcegaglia over 10 years. Speaking of total group production, in pickled coils we increased from 660 k t to about 3 million t expected in In cold-rolled, our growth was massive from 360 k t to over 2 million t expected 11

12 Speaking of coated products, the galvanized production has passed from 143 k t (in the period where we had only 1 line), up to almost 2 million ton expected in the coming months with 5 lines running. And top of our range, the pre-painted production, rising from zero to almost 500,000 ton expected in next period. Of course, part of this production is verticalized for internal use, as tubes or profiles. 12

13 A look at our total flat product sales, showing our progress through the years. We can see that the quota of exports has sharply increased, of course thanks to the capacity additions. 13

14 Today we can say Marcegaglia has gradually transformed itself from a well-established tube maker to a global player with a strong presence in the flats market. And today, flats represent nearly 50% of Marcegaglia global sales. 14

15 Now, a short look at the global capacity and feasibility of Marcegaglia including all processing plants: The pickling lines are 3 in total, for 3.5 million tonnes of annual capacity, from 1.2 to 6 millimetres Materials include - Structural steels, also with improved corrosion resistance - high-yield strength steels for cold forming - low carbon steels for cold forming 15

16 The cold rolling capacity is very high and diversified - also in our headquarters of Gazoldo - the lines are 8 in total, for a total capacity of 2.5 million tonnes of annual capacity. Thickness - depending on width - can be from 0.25 to 3 millimetres. 16

17 Materials include - steels for cold forming - semi-processed steels - electrical steels - special standards for radiators, furniture, drum packaging - and full hard steels More than 70 static annealing furnaces and 6 total skinpassing lines complete the picture in terms of improvement of mechanical properties and surface quality. 17

18 Let s move to galvanized... Here we have today 5 lines total, with over 2 million tonnes total capacity, from 0,3 up to 4 millimetres. Steel standards include structural grades, as well as high-tensile strength qualities for cold forming and deep drawing qualities. 18

19 And then we have the pre-painted production. Here we can count on a very high variety of solutions: more than 25 standard systems of organic coating from fluoro-carbon to epoxy-polyesters, on zinc coated base or cold rolled base. 19

20 In addition to pickling, cold-rolling, galvanizing and prepainting, we have: - narrow strips production, - de-coiled sheets production these are located in several of our plants worldwide, including Brazil and Poland; 20

21 And as flat products we can count also on - heavy plates production, in a specialized plant in northern Italy, also equipped with harbor facility for supply and shipping. 21

22 So - what are the key features of Marcegaglia - in the scenario of flat production today? Especially, when we look at the main challenges that are dominating the market, that are Consolidation on one side - Overcapacity on the other; Flexibility on one side - and Volatility on the other. 22

23 we can say that Marcegaglia is well-equipped to face the challenges, thanks to its independency as a player on the market - at the same time keeping its focus oriented to the market. 23

24 And thanks to its choices in investing in strategic locations: - Ravenna and San Giorgio di Nogaro, both plants located on the Adriatic sea, in a position to dominate the whole Mediterranean area - Brazil for South America - Poland, for Eastern, Central and Northern Europe - and tomorrow possibily China, with the existing plant in Yangzhou. 24

25 Looking to the current market situation, we see the guidelines of future actions for players like Marcegaglia: - the exploitation of growth prospects within economies of scale, also looking to contain costs - the efforts to increase capability of negotiating raw material prices, with the chance to explore new joint-ventures on the upstream market; 25

26 - a push to expand the range of products constantly - the focus on innovations - locating in emerging markets 26

27 Looking at the short term, let s see how risk factors will affect the current year: - High costs of raw materials (iron ore, scrap, gas...) will keep high the cost to produce steel, especially in Europe. - EU mills need to further discipline the production because of slowdown of final demand. 27

28 - Steel buyers need to source the steel locally because of: - US dollars strengthening - financial restrictions - short term delivery because of price volatility risk As a consequence, steel prices will sightly increase in the short term. 28

29 If we look to a longer term outlook, next year and beyond, we think that: - New productions and investments upstream will mitigate the raw material costs - EU mills need to further consolidate (merger & acquisition) to compete with the Middle East players. 29

30 - Good real consumption growing in the EU neighbour countries: Eastern Europe, Mediterranean - Also EU steel distribution chain needs to change, consolidating by merger & acquisition 30

31 In conclusion: EU steel market structure generally will change dramatically, as well as the role of imports will be scaled down. Italy will play a central role in finished products on the European and Mediterranean market....and Marcegaglia is aspiring to the leading position. 31

32 I wish to thank you for your attention. We are available for any further information at our stand all day long. I wish to remind you next speech about our carbon tubes production network, tomorrow at 10,30. Thank you. 32