The business slogan of the newly formed joint-venture company Primetals Technologies is: “Creating the future of metals as one.” What does it mean to create the future?
People, things and circumstances can, of course, have an impact on future events. It happens all the time. The result may be long- or short-term, limited or extensive in scope, and may affect many or just a few. For example, the construction of a new bridge over a river or other infrastructural improvements can significantly reduce traveling time and save fuel costs for thousands of people over decades. Or the decision to start a business may provide a source of income for a number of individuals for many generations. The skilled political leader may be in a position to enact decisions that lead to increased prosperity for millions of human beings, nationally and even globally.
The Industrial Revolution that began around 1760 marked a major turning point in history that benefited the general population on a large scale. Thanks to a series of groundbreaking inventions and developments at that time – such as major improvements to the design of the steam engine by the Scottish inventor James Watt – manual production methods began to be increasingly replaced by machines. This was particularly true for the manufacture of iron and other metals. Tools, agricultural implements, wheels and vehicles could be made using metals that were far cheaper to produce than ever before. Almost every aspect of daily life was changed in some way, and the standard of living began to gradually improve for the first time ever.
Pioneering developments in metallurgical processes dramatically reduced the cost of making steel. These included the use of coal for smelting ores (instead of charcoal) that began in the 1700s, the introduction of the Bessemer, Thomas and Siemens-Martin steelmaking processes in the 19th century, all the way to the worldwide application of LD (BOF) technology that commenced in the 1950s. The annual world average per capita consumption of steel went from virtually zero in 1760 to 225 kg today. According to the World Steel Association (worldsteel), the global steel industry today directly employs some 2 million people. This highly versatile material is and will remain the predominant metal used in the automotive, construction, transportation, power and machine-manufacturing industries. Assuming a multiplication factor of 25 for the number of persons involved in selling, processing, working or servicing steel or steel products, worldsteel estimates that this industrial segment directly or indirectly employs more than 50 million people. When one adds in the number of workers occupied with the mining and processing of other types of metals, it is obvious that major developments in this field have the potential to dramatically affect society as a whole – as they did in the Industrial Revolution.
Despite the rapid technological advances and the progress that has been achieved, the metals market is currently faced with an unprecedented crisis. World production of crude steel reached 1.662 billion metric tons in 2014. However, with a total installed capacity in the range of 2.1 billion tons per annum, there is a current worldwide overcapacity of nearly 440 million tons. Increasing competition, fluctuating prices and reduced growth have made life tougher for producers and suppliers alike.
At the same time, billions of tons of steel are now in use in buildings, vehicles, ships, machines, bridges and other structures, more than 80% of which will one day be recycled. With consideration to the continually increasing quantities of scrap that are becoming available, are we witnessing the beginning of a dramatic decline in primary steelmaking via the traditional blast furnace route? This is one of the many areas where considerable rethinking of the status quo is required. New solution approaches are called for, especially in regard to recycling and processing scrap more efficiently in electric furnaces and converters*, improving refining techniques of scrap-based steel, as well as supporting producers in developing special steel grades for new market applications.
In response to these and other challenges confronting the metals industry, Siemens VAI Metals Technologies (Siemens VAI) and Mitsubishi-Hitachi Metals Machinery (MHMM) joined forces in January 2015 to form Primetals Technologies. This enterprise represents a powerhouse of well-established brands, combining the experience and technological legacies of companies such as VAI, Davy, Fuchs, Morgan, Pomini, Clecim, Cosim, Mitsubishi, Hitachi, IHI, Concast India, GFG, vatron and others.
The joint venture unites the singular strengths and proven competencies of both Siemens VAI and MHMM in a way that is unique in the industry. Siemens VAI particularly excels in upstream processes where the highest cost burden in steelmaking arises, especially in regard to raw materials, energy consumption and emission control. With its long history in plant engineering and construction, production steps are fully integrated and automated in such a way that the entire production process is optimized from the raw materials to finishing lines. MHMM is distinguished by its superb downstream rolling and processing expertise where the quality of the steel products is decisive. All of this is backed by the extensive service, workshop and manufacturing capabilities of both partners to support producers in maintaining their metallurgical facilities at peak performance levels throughout their entire lifecycle.
To create the future, you must build upon the past. Through the merger of two strong partners into a single entity, the foundation has been laid to find the solutions to meet tomorrow’s challenges. And together with our customers, suppliers and stakeholders, our goal is to create the future of metals as one.
Dr. Lawrence Gould
Managing Editor of Metals Magazine
Primetals Technologies, Limited