Andritz Rolling Mills and Strip Processing Lines

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Andritz Rolling Mills and Strip Processing Lines
Rolling Mills and
Strip Processing Lines
Capital Market Days 2007
Business Profile
The Business Area
ƒ
develops, designs, builds and
commissions plants for the
metallurgical industry in the field of
• cold rolling, surface treatment and
processing of metallic strips
either out of
• steel or stainless steel or
nonferrous metals and
ƒ
manufactures core equipment either in
own shops or has it manufactured,
under supervision, by sub-suppliers
worldwide.
Capital Market Days 2007
Slide No. 1
Strategy
The strategy of the Business Area is …
… to have complete full-line capability for all essential processes of
the value chain of our customers in its entirety and also to possess an
integrated know-how for
ƒ Mechanical engineering
ƒ Processes engineering (chemical and thermal)
ƒ Automation and electrification
in order to …
Capital Market Days 2007
Slide No. 2
Strategy (cont’d)
ƒ Develop integrated systems under special consideration of the
interdependencies of the different process steps
ƒ Minimize interface problems related to technology and order execution
ƒ To protect our know-how
ƒ To increase Sales volume and absolute gross margin per project
ƒ To reduce risk, time and cost for commissioning
ƒ To reduce cost for sales and order execution
ƒ To increase customer satisfaction
Capital Market Days 2007
Slide No. 3
Value chain of steel production
Upstream
Iron making
Steel making
Downstream
Cold
Rolling
Slabs
HR Coils
Strip
Processing
Finishing
Final
Product
Market
Baling
ƒ Close to raw material sources
ƒ Close to market
ƒ Very cyclical business depending
on economical parameters
ƒ Rather continuous business
depending on technology changes
Capital Market Days 2007
Slide No. 4
Process chain from hot rolled strip to value added products
Cold Rolling
Continuous Pickling Line
Push Pickling Line
Annealing/Pickling
Stainless
Steel
Hot Rolled Strip
Carbon
Steel
Pickling
Annealing
Pickling
Tandem mill
Reversing mill
Skin pass mill
Cold Rolling
Tandem Mill
Cluster mill
Reversing mill
Skin pass mill
Annealing
Continuous
Annealing
Bell type annealing
Annealing
Bright Annealing
Annealing Pickling
Coating
Finishing
Cutting + Slitting
Levelling line
Hot dip galvanizing Packaging Line
Punching
Electrogalvanizing
Colour Coating
Finishing
Cutting + Slitting
Levelling line
Packaging Line
Punching
Andritz
Sundwig
Thermtec
SELAS
Non--ferrous
Non
Metals
Kaiser
Pickling
Milling lines
Grinding lines
Pickling lines
Cold Rolling
Cluster mill
Reversing mill
Temper mill
Annealing
Continuous
Annealing
Capital Market Days 2007
Slide No. 5
Coating
Colour Coating
Finishing
Cutting + Slitting
Levelling line
Packaging Line
Punching
Products
... of the Business Area are derived from the process chain of its
customers, starting with the feed stock hot rolled strip until the final
handling of the finished product (strip or sheet).
o Cold rolling mills
o Surface treatment
•
2-, 4-, 6-, 12-, 20 high
•
Continuous and push pull pickling
•
Roll grinder
•
Degreasing
•
Electrolytic and hot dip galvanizing
•
Tinning
o Strip processing lines
•
Continuous annealing
•
Colour coating
•
Grinding
•
Chrome plating
•
Slitting
•
Cutting (thick gages)
•
Levelling
•
Hydrochloric acid (HCL)
•
Inspecting
•
•
Packaging
Mixed acid (HF, HNO3)
•
Oxide-production (Ni, Co, Ti etc.)
•
Punching
o Acid regeneration
Capital Market Days 2007
Slide No. 6
Business development 1998 - 2002
Sales
Sales 1998-2002
1998-2002
Medium-term targets
MEUR
ƒ Sales approx. 200 MEUR
ƒ EBITDA approx. 8 %
200
150
135.0
169.1
167.4
177.4
2000
2001
2002
140.8
100
50
0
1998
Order
Order Intake
Intake
EBITDA
EBITDA 1998-2002
1998-2002
8%
MEUR
196.3
200
150
1999
141.9
112.6
6.2%
175.7
6%
5.1%
5.3%
5.1%
5.2%
1998
1999
2000
2001
130.2
4%
100
50
2%
0
1998
1999
2000
2001
2002
0%
Capital Market Days 2007
Slide No. 7
2002
Business development 2002 - 2006
Sales
Sales 2002-2006
2002-2006
MEUR
Medium-term targets
ƒ Sales approx. 500 MEUR
ƒ EBITDA > 8 %
500
450.5
400
275.9
300
200
235.4
177.4
173.1
2002
2003
100
0
2004
2005
2006
Order
Order Intake
Intake 2002-2006
2002-2006
EBITDA
EBITDA 2002-2006
2002-2006
MEUR
500
444.8
8%
401.9
400
6.2%
287.6
300
200
7.3%
6.1%
6.6%
6%
266.7
175.7
3.8%
4%
100
2%
0
2002
2003
2004
2005
0%
2006
2002
Capital Market Days 2007
Slide No. 8
2003
2004
2005
2006
Development of Order Intake
Rolling Mills and Strip Processing Lines
Order Intake
MEUR
600
500
CAGR 1992-2006:
~ 16%
z
zz
400
Incoming Orders
linear trend
300
200
100
0
1992
1994
1996
1998
2000
2002
Capital Market Days 2007
Slide No. 9
2004
2006
Year
2008
year
Market approach
ƒ
Most of the products are placed in the high-priced markets with demanding
technical requirements
ƒ
Focus on strongly growing markets like China, India and Russia and devote
most resources there without jeopardizing highly developed European market
ƒ
Focus on selected high potential customers and try to become single source
supplier
ƒ
Strictly follow strategy to supply complete systems with own technology to
minimize risks and maximize sales and margin
ƒ
ƒ
Try to get high market share to set technical standards
Standardize as much as possible
Capital Market Days 2007
Slide No. 10
Market position
2000
2006
Market share
~ 10 – 12 %
~ 26 %
Market size (accessible)
~ 1,200 MEUR
~ 2,000 MEUR
Products
evenly distributed
strong focus on stainless steel
Estimated market
shares and competition
structure
2006
Others
19%
Andritz
26%
19 Others <3%
15%
SMS
13%
FIMI
3%
Fagor
4%
DMS/SH
6%
CMI
4%
VAI
5%
LOI/Drever
5%
Source: Andritz estimate
Capital Market Days 2007
Slide No. 11
Order Intake by Region
Where are the customers of the Rolling Mills and Strip Processing Lines
Business Area?
EU
EU
40
40%
%
30
49%
%
30%
% 49
North
North
America
America
22%
%
22%
%
% 00%
Asia
Asia
57
57%
%
68
68%
%
47
47%
%
Others
Others
11%
%
00%
% 44%
%
Average
Average2001-2004:
2001-2004:230
230MEUR
MEUR
Incoming
IncomingOrders
Orders2005:
2005:445
445MEUR
MEUR
Incoming Orders 2006: 402 MEUR
Capital Market Days 2007
Slide No. 12
Market
Carbon Steel:
Situation in 2003
Situation in 2007
¾ Average annual growth for crude steel
¾ Since 2002 annual growth rate of approx. 7 %;
in BRIC-states more than 10 %
production 1-2 %
¾ Steel analysts expected steel production of
¾ Steel production in 2007 will probably reach
1,200 mill. tons and grow to 1,500 mill. tons in
2010
1,000 million tons in 2010
¾ China will import approx. 30-40 million tons of
¾ In 2007 China will be a net exporter of 40 mill.
steel, mainly high quality flat products
tons of steel, but still needs to import high-quality
flat products
¾ Approx. 40 % (~ 350 mil tons) of steel production ¾ Still same ratio, which means approx.
goes to flat rolled products which is the focus of
Andritz
¾ Growing orders for cold rolling mills and strip
¾ Many more orders followed until 2007, booming
processing lines in China
market for plate mills and electrical steel last 2-3
years
¾ Some investments in Russia in strip processing
lines
480 mill. tons in 2007
¾ Booming market for upstream equipment strip
Capital Market Days 2007
Slide No. 13
processing lines and plate mills. However, lower
level compared to China
Market (cont‘d)
Carbon Steel:
Situation in 2003
Situation in 2007
¾ Few activities in India for investments in steel
¾ Investment activities increased and steel
¾ Investment activities in Europe are still very
¾ After restructuring of steel industry investment
industry
capacity of roughly 40-50 mill. tons has been
reached. Huge projects are under development
but suffer from difficult political situation.
Capacity of 100 mill. tons expected after 2010
sluggish. Restructuring of steel industry will be
followed by investing in appropriate equipment
mainly happened in Eastern Europe. Niche
players like Voest, Salzgitter, etc. invested in
improving their product range
¾ Investment activities in North America have been ¾ Few investments financed from overseas have
happened. Thyssen will start with huge project in
Alabama at the end of 2007
close to zero in the last years. Many companies
went bankrupt. No sign of recovery although
restructuring of steel industry has started
¾ South American market seems to be saturated
with recent investments. Future investments are
mainly upstream for merchant slabs
¾ Some projects for merchant slabs (Thyssen,
Capital Market Days 2007
Slide No. 14
Baosteel) are under construction.
No investment in downstream activities
Market
Stainless Steel:
Situation in 2003
Situation in 2007
¾ Average annual growth for stainless steel
¾ Since 2003 annual growth rate for stainless flat
¾ Capacity for flat products has been strongly
¾ Capacity growth mainly happened in Asia (China,
¾ China’s flat stainless production is less than
¾ China‘s flat capacity has grown to approx.
¾ Russia is still hesitant to invest in stainless steel
¾ No change to situation 4 years ago
¾ Small capacity for local consumption in India
¾ New investments (Jindal, Salem) will increase
production was approx. 5-7 % in recent years
production capacity approx. 12 %
(2003: ~ 13 mill. tons; 2007: ~ 21 mill. tons)
increased in Europe and USA
India, Korea, Japan, Taiwan)
1 mill. tons
production
9 mill. tons; TISCO is one of the largest stainless
steel manufacturers worldwide
capacity to more than 2 mill. tons in 2010. Further
capacities are under discussion, mainly for export
¾ High cost for nickel, chromium and molybdenum
jeopardize growth of conventional stainless steel
grades
Capital Market Days 2007
Slide No. 15
Market
Non-ferrous Metals:
Situation in 2003
Situation in 2007
¾ Electronic industry is recovering in Asia
¾ Investments in rolling mills for copper, brass and
¾ Aluminium strip production slowly growing for
¾ Main growth for aluminium strip production
construction and automotive industry
carbon increased, but companies are often
selecting simple equipment
happened in China. Energy supply is limiting
further growth
Capital Market Days 2007
Slide No. 16
Competitors
ƒ
Main suppliers of equipment for metallurgical industry are still located in
Europe and Japan
ƒ
Local suppliers for equipment in China, Korea and India are growing but sell
rather simple equipment. Suppliers for upstream equipment (iron making) feel
already the heat of low cost competitors
ƒ
While European suppliers are active worldwide, Asian suppliers mainly
concentrate on their home markets and emerging markets.
ƒ
Due to current booming market for metallurgical equipment consolidation of
supplying industry has nearly stopped
ƒ
Merger of VAI with Siemens Automation improved competitiveness of Andritz
Capital Market Days 2007
Slide No. 17
Competitors
ƒ
Full liners like SMS-DEMAG, VAI-Siemens, Danieli, which cover the whole
process chain (upstream and downstream), have only limited advantage.
ƒ
Smaller suppliers like DMS, CMI and others often have very competitive
prices compared with the large suppliers.
ƒ
Some competitors like SMS-DEMAG and CMI try to copy the Andritz strategy
to combine all necessary technologies in one group.
ƒ
Reputation of Andritz amongst customers and competitors is very high today.
Andritz is the benchmark in its market.
Capital Market Days 2007
Slide No. 18
Important customers
Europe
Asia
Thyssen Krupp Steel
Salzgitter
Arcelor
Corus
Voest Alpine
Diehl
Kabelmetall
Böhler-Uddeholm
Outokumpu
Riva
Acerinox
Arvedi
…
Baosteel-Group
Wisco
Posco
Tisco (Tajyuan)
Tisco (India)
Maanshan
Handan
Benxi
Jisco
Yieh-Group
China-Steel-Group
Handeed
Jindal
Sail
…
North America
US Steel
Mittal Steel
Nucor
Dofasco
Hylsamex
Worthington
J&L
NAS
…
Capital Market Days 2007
Slide No. 19
Russia
Magnetogorsk
Novolipezk
Severstal
…
Australia
BHP
References for Stainless Steel Lines
ThyssenKrupp Sandvik
Lukens
Steel
Avesta Polarit
Böhler-Uddeholm
Ergste
North
American
Stainless
Theis
Serp I Molot
Avesta
Salem
TISCO
Ugine
Acerinox
JISCO
Taiyuan
SKS
BAOXIN
LISCO
Tang Eng
J&L
Mexinox
ALZ
Arinox
Acesita
Outokumpu
Chien Shing
Chang Mieng
Columbus JV
Yieh United
Tscheljabinsk
Capital Market Days 2007
Slide No. 20
Tung Mung
Nisshin Steel
Nippon Steel
Sumitomo
Nippon
Mining
Sammi Steel
POSCO
BHP
Annealing and Pickling Line for ThyssenKrupp Stainless
Technical Data:
Line capacity:
40,000 kg/h
Line speed: max. 100 m/min.
Strip width:
600-1,380 mm
Strip thickness:
0.2 – 2.0 mm
Strip accumulator
Annealing furnace
Capital Market Days 2007
Slide No. 21
HNO3 pickling section
Hot Dip Galvanizing Line for ThyssenKrupp Stahl
ThyssenKrupp Stahl,
Dortmund/Germany
Capital Market Days 2007
Slide No. 22
Hot-Dip Galvanizing Line for ThyssenKrupp Stahl
Technical Data:
Line capacity:
Line speed: 180 m/min.
Strip width:
Strip thickness:
Strip accumulator
Coater and exit vertical strip accumulator
Capital Market Days 2007
Slide No. 23
450,000 t/year
750 – 1,650 mm
0.3 – 1.5 mm
Shear Line for side trimming, slitting, cut to length
and levelling for TKN
KruppThyssen Nirosta, Krefeld/Germany
Capital Market Days 2007
Slide No. 24
Push Pull Pickling Line for ThyssenKrupp Stahl
High-capacity push pickling line
Capital Market Days 2007
Slide No. 25
Blanking Line for Volkswagen
Blanking line for rectangular and trapezoidal blanks
Capital Market Days 2007
Slide No. 26
Leveller and Cutting Shear for CORUS, Germany
Capital Market Days 2007
Slide No. 27
Bright Annealing Line for Shanghai Krupp Stainless
Vertical Muffle furnace
Capital Market Days 2007
Slide No. 28
Electrolytic Galvanizing Line for Baosteel
Detail of an electrolytic galvanizing cell according to
the patented Gravitel process
Capital Market Days 2007
Slide No. 29
20-high Cold Rolling Mill for Arcelor (ALZ)
Capital Market Days 2007
Slide No. 30
20-high Rolling Mill for ThyssenKrupp, Krefeld/Germany
Capital Market Days 2007
Slide No. 31
Grinding Machine
Capital Market Days 2007
Slide No. 32
Punching and Metal Forming Presses
Capital Market Days 2007
Slide No. 33
Review on Capital Market Days 2003
Where do we go in the next 3 to 5 years?
Assumption at CMD 2003
Status 2007 / 2008
¾ No clear picture beyond 3 years time horizon
¾ Super cycle for steel industry already lasts
¾ Exploit our potential in stainless steel market,
¾ Today, the Andritz Group is the main
¾ China may develop to Andritz „bread and butter
¾ In recent years, more than 50 % of Andritz Sales
¾ Part of our engineering capacities will move to
¾ Engineering office in Bangalore (approx. 50
almost 5 years. Another 2 to 3 years are
expected mainly driven by investment in
Infrastructure in Asia (China)
especially in China
supplier of rolling mills and strip processing lines
for stainless steel worldwide, with a high market
share in China
market“ however strong requirement for local
supply
low cost countries like China, India or Russia
came from China. Due to increasing
requirements for sole supply of engineering
Andritz participates only in selected projects
Capital Market Days 2007
Slide No. 34
people) and Shanghai (5 people) is executing
detail engineering, mainly for local projects.
No activities in Russia up to now.
Review on Capital Market Days 2003
Where do we go in the next 3 to 5 years?
Assumption at CMD 2003
Status 2007 / 2008
¾ Enlargement of know-how for cold rolling
¾ Development of high speed 6-high mill for
¾ Split design teams for low cost equipment and
¾ This idea is not accepted by the market. If
¾ Acquisition of suppliers of equipment for
¾ Acquisition of Kaiser manufacturing highly
through own development and acquisition
highly sophisticated equipment
processing lines
carbon steel. Two mills supplied to Korea which
are working very well
¾ Development of integrated tandem S-6-high
rolling mills for stainless steel. Andritz supplied
all rolling mills worldwide since 2003 for this
application
¾ Development of widest (2,100 mm) S-6-high mill
for stainless steel. Mill has been operating since
mid 2007 in Taiyuan
customer decides for Andritz equipment he
expects highly sophisticated technology
sophisticated mechanical punching presses
mainly for automotive parts
¾ Other acquisition targets were either too
expensive or did not fit anymore in the strategy
after examination
Capital Market Days 2007
Slide No. 35
Review on Capital Market Days 2003
Where do we go in the next 3 to 5 years?
Assumption at CMD 2003
Status 2007 / 2008
¾ Scope of supply for automation and
¾ Today many customers give Andritz full
¾ Increase after sales business with recent
¾ Development of after sales business only limited
¾ Stabilize sales on current level if worldwide
¾ Strong increase of Sales in recent years
electrification will further grow when our
references are fully accepted by the market
strategy change
market recovers
responsibility for automation and electrification.
Due to limited resources, sub-suppliers like
ABB, Converteam, Rockwell are involved
success. Very attractive business for flatness
systems but not for revamps
Capital Market Days 2007
Slide No. 36
CMD 2007: Where do we go in the next 3 to 5 years?
Our expectations:
ƒ
Based on the current project list, we expect a solid development of Order
Intake for the next few years, which means Sales will be secured at least until
2010
ƒ
GDP growth in China, India and other Asian countries (like Vietnam) very
strong; as a result, investments in infrastructure, housing, energy production,
basic supplies and automotive industries will continue to be strong
ƒ
High raw material cost may deteriorate further growth of steel and stainless
steel industry and make technology change in downstream equipment
necessary
Capital Market Days 2007
Slide No. 37
CMD 2007: Where do we go in the next 3 to 5 years?
Our expectations:
ƒ
Investment boom for metallurgical equipment in India if government is able to
better control conditions in local areas
ƒ
Engineering activities of the Business Area in India and China will further
grow. Eastern Europe or even Russia will probably be our focus for new
engineering offices
ƒ
Increase our sales activities in Russia. Special requirement for EPC-projects
necessary where we gained some experience in recent years. Development
of infrastructure (Olympic games) and automotive industry will require further
modernisation of Russian steel industry
ƒ
Acquisition of companies and technologies to support our growth strategy for
sales and profit
Capital Market Days 2007
Slide No. 38
CMD 2007: Where do we go in the next 3 to 5 years?
Our expectations:
ƒ
Market will increasingly require Andritz automation and electrification. Growth
in resources difficult Æ potential to get needed resources in Asia
ƒ
US market seems to recover Æ the Business Area has to re-establish local
resources
ƒ
Get sustained high Sales volume even if the market calms down to a lower
level
Capital Market Days 2007
Slide No. 39

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