“Stainless steel is our most important raw material, and Outokumpu was our Number One supplier for it last year,” asserts ElringKlinger’s Purchasing Director Stefan Schötz at the inauguration celebration of a major expansion at Outokumpu’s Kloster thin strip plant, located in Långshyttan, Sweden. ElringKlinger of Germany is the world leading supplier of cylinder-head and specialty gaskets, heat shields, and cam cover modules for cars and trucks. The company chose the inauguration event to make the statement and hand ElringKlinger’s Supplier of the Year Award 2006 to Kloster, as a recognition of the plant’s delivery record and high quality. Kloster receives the recognition for the second time in three years, being the first supplier to be awarded by ElringKlinger twice.

ElringKlinger has more reason to celebrate with Kloster: Outokumpu’s investment means much needed new capacity and increased flexibility for the gasket maker. Kloster is expanding production capacity by 50 percent, to be ramped up in stages. At the same time, the plant is broadening its product range to include thicknesses down to 0.12 mm in the annealed condition and widths up to 1100 mm. ElringKlinger, already Number One of Germany’s listed companies in automotive deliveries, is growing fast and needs its suppliers to follow. “We can only be successful if we have the right and flexible suppliers,” Mr. Schötz says, pointing out that original equipment manufacturers like ElringKlinger are constantly making adjustments in production, which puts pressure on suppliers.

Since Kloster’s previous award from ElringKlinger for 2003, business between the two companies has doubled, involving a great deal of technical cooperation and joint product development. The Outokumpu investment makes it possible to grow further together.

The investment is in line with the Outokumpu Group’s commercial goals of supporting the business goals of its customers and following them in global expansion. “Before the current investment, we had reached our limits of growth and meeting the Group goals,” says Kloster’s General Manager Petter Eriksson, reflecting on the background of the expansion.

In addition to cylinder-head gaskets, the majority of Kloster’s products go to plate heat exchangers, to automotive flexible tubes, and for the welding industry. Approximately 95 percent of the customers are end users. Today end-user customers are increasingly keen to see their suppliers become deeper involved in their business. “Now we will be able to do that more systematically and efficiently,” Mr. Eriksson asserts.

The investment is divided into four sub-projects: there will be 10,000 square meters of new floor space for production facilities, a new cold rolling mill, and new bright annealing and slitting lines, to complement the previous, similar lines.

ElringKlinger operates worldwide and today supplies all car and truck manufacturers in the world. Annual turnover is approximately 530 million euros.

For more information, contact:

Petter Eriksson
General Manager
Thin Strip Kloster, Outokumpu
Tel. +46 225 63251
E-mail: petter.eriksson()outokumpu.com