“The € 550 million investment program will make us the best steel producer in the world in terms of the range of our product palette.” Olof Faxander, president and CEO of SSAB Swedish Steel, outlines the effects of the investments which will be made at the SSAB plants in Borlänge and Oxelösund in Sweden and in several plants in North America.
The main target of the investment programme is to increase production of the advanced high strength steel products which have already made SSAB well known all over the world.
“The sales of our advanced high strength steel grades and our quenched and tempered products have been positive for many years, and trends all point to increasing demand,” says Olof Faxander.”
He is referring to debates about more environmentally friendly materials, which include lighter products and the sustainable use of natural resources.
Saves fuel and environment
“We have the steel grades that allow our customers to manufacture lighter and safer cars, which saves fuel for every mile driven on the road,” Olof Faxander explains. “But the same goes for most products; most things benefit from lighter weight.”
In 2008 SSAB celebrates its 30th anniversary. The company was founded in 1978 based on the remains of three old steel manufacturers.
“Of course we are proud of our origins in the traditional Swedish steel industry,” says Olof Faxander. “But it is very important to remain focused on the future to stay ahead of our competitors in the market.”
Future concept
There are three cornerstones in Olof Faxanders future concept:
- Make smart investments to stay ahead of demands
from the market.
- Keep the world leading position of SSAB niche
products; advanced high strength steels and quenched
and tempered steels.
- Grow and develop together with customers.
“During these 30 years SSAB has developed not only unique products, but also a very special relationship to our customers,” Olof Faxander says. “The collaboration
between our customers and our technical support is essential for many of the new products that are manufactured from our steel grades.”
Lately the debate about environmental matters has had a new focus. The dramatically increasing oil price pinpointed the need for lower fuel consumption
for all kinds of freight – from ordinary family cars to trucks and other rolling stock.
Environmental advantage
SSAB is aware of the positive effects, from an environmental oint of view, that the advanced high strength steel products have. Using those steel grades to gain low weight can easily reduce fuel consumption by five percent.
There are lots of other environmental advantages to advanced high strength steel. So many that SSAB decided to introduce Green Steel onto the market. The properties of the steel that SSAB manufactures gives environmental advantages in almost every application. And the more the designer focuses on the environmental potential in these steel grades, the better the result.
Support on green issues
The Knowledge Service Center at SSAB often supports customers in green issues and has seen surprising results in weight reduction, often in combination with new design. This also translates into more costefficient manufacturing and less maintenance for the final user of the product.
Olof Faxander is convinced that SSAB will maintain the advantages already gained by the investments put in place in the 1980s. This made it possible to develop not only more advanced steel grades, but also to increase the production far beyond what most people ever expected.
Last year SSAB merged with the North-American steel manufacturer IPSCO and in June 2008 SSAB divested the tubular operations within IPSCO. The steel operations retained within SSAB will operate as the North American Division.
“Our new organisation in North America fits very well into our structure,” says Olof Faxander. “This division of SSAB has the advantage of modern plants and over time we will have positive synergy effects from the deal. At the same time it will strengthen our position on the markets in the USA and Canada.”
When SSAB was created it was, in many respects, something new in the steel industry. SSAB had a strong focus on niche products, and did not even try to compete on lower grade steels.
SSAB has its roots deep in the Swedish steel industry which emerged from the iron-ore mines discovered in central Sweden during the 16th and 17th centuries. In all, the history of Swedish Steel can be traced a millennium back in time.
Investments crucial
“This is important,” states Olof Faxander. “Because we know our history, we are well aware of how crucial it is to make investments from a long-term perspective. That is the only way to stay ahead when you are in the steel industry and we intend to stay in the forefront – as our customers expect us to”
Facts: The € 550 million investment programme
The € 550 million investment programme includes
the following projects:
- Establishing a new fully integrated heat treating line for quenched and tempered (Q&T) steel plate in the United States. The capacity of the new line will be 300,000 tonnes. In addition to the new quenching line there will be upgrades in the US facilities to capture certain synergies announced at the time of the acquisition of IPSCO.
- Establishing quenching capacity for production of Q&T strip steels, including a new cut to length facility in Borlänge. The aim is to fully utilize the competitive strengths of the hot strip mill and, in parallel, to leverage SSAB’s high end-user application know-how. Through this investment, Borlänge will have the ability to produce quenched strip products. The initial target is to supply the market with a volume of 300,000 tonnes, with possibilities for further development.
- Downstream and de-bottlenecking investments at the Oxelösund site to further develop the highly specialized production system at Oxelösund. The Q&T steel volume in Oxelösund will increase by 80,000 tonnes once the investment program is completed.
The expansion program will be commissioned in phases and be completed in 2012. The investments are expected to be financed through internally generated cash flow.