After moving to the next phase in its strategy in September 2007, Outokumpu launched an investment program totaling some EUR 2 billion. In October 2008, as a result of the global financial crisis and a sudden weakening in stainless steel demand, Outokumpu decided to review the program.
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In December 2008, a decision was made to postpone the investment program almost entirely for at least 12 months. Continuing any of the projects would be subject to a separate decision based on an updated feasibility study. Investments worth some EUR 1.5 billion were postponed.
On 14 December 2010 a decision was made that Outokumpu does not intend to re-start the postponed investments in Avesta, Sweden (e.g. the new annealing and pickling line). The total investment would have been some EUR 350 million. The original investment, approved in September 2007, was EUR 550 million, of which EUR 200 million related to the expansion of melting capacity in Avesta was cancelled already in the third quarter in 2009. |
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Quarto plate production capacity at New Castle, United States
The investment to expand quarto plate production capacity at New Castle (in), in the US, was completed and finalised in August 2010. This EUR 45 million investment increases the annual production capacity at this production site by 20 000 tonnes to 70 000 tonnes.
Quarto plate production capability and capacity in Degerfors, Sweden
In June 2010, Outokumpu announced that the investment of EUR 104 million to increase quarto plate production capability and capacity in Degerfors in Sweden is in its initial face. Annual production capacity at Degerfors will be increased by 40 000 tonnes to 150 000 tonnes. Completion of this investment will increase the Group's annual quarto plate production capacity to some 220 000 tonnes.
Ferrochrome production capacity in Tornio, Finland
In June, 2010 Outokumpu also announced that the EUR 440 million investment project to double ferrochrome production capacity at Tornio in Finland is proceeding according to plan.
Outokumpu decided to restart the project to double the Group's ferrochrome production capacity in Finland. The investment totals EUR 440 million including interest and is based on an updated feasibility study conducted during the spring. The expansion secures internal ferrochrome sourcing and makes Outokumpu a significant seller of ferrochrome. The implementation of the project will start immediately and when finalised, adds about 120 permanent jobs in the Ferrochrome Works in Tornio and in the Kemi mine.
The original investment was decided in June 2008 but was put on hold in December 2008 due to the financial crisis and unsecure market conditions. This investment doubles the ferrochrome production in Tornio to 530 000 tonnes annually. It enables the Group to cover its internal needs and supply the global market with over 200 000 tonnes of ferrochrome annually.
The project organisation has been established and the first phase of construction work has begun. Detailed planning for the project is currently ongoing.
Service centers
SoGePar acquisition
On April 2008 Outokumpu acquired the SoGePar Group, an Italian independent distributor of stainless steel. Synergy benefits resulting from the acquisition, allowed the investment program in service centers in Europe to be streamlined and optimized.
Willich service centre investment
Outokumpu has expanded the stock and processing capacity of its service center in Willich in Germany. The expansion supports the company's strategy to strengthen its service center network with the aim to increase sales to end-users and project customers, and to retain the stable relationship with distributors and processors. The construction work was based on an investment decision in 2007. The project consisted of increasing the site area, doubling the service center hall and installing of a new 2 meter cut-to-length line and a new 650 mm slitting line. The expansion has doubled the production capacity from 60 000 tons to 125 000 tons. The total investment was EUR 26.5 million.
China Service centre investment
Outokumpu has established a service centre in China, the world's fastest-growing market for stainless steel. The new facility supports the Group strategy of expanding operations in Asia and serving end-user and project customers with value-added special products. In the main, Outokumpu's offering to the Chinese market consists of special grades, especially duplex grades, employed in the most demanding applications in the energy, petrochemical, transportation and pulp and paper sectors. The new Kunshan service centre has an annual capacity of some 30 000 tonnes of stainless steel and employs approximately 50 people and represents an investment by the Group of some EUR 20 million.