ArcelorMittal Exec: Must Consciously Support Innovation, the “Lifeblood of European Manufacturing”
12/04/2014 - Speaking at a Financial Times summit on the future of European manufacturing, Robrecht Himpe, chief technology officer at ArcelorMittal, outlined what it will take to ensure a healthy future for the sector: “Our three main ingredients for a successful European manufacturing sector are innovation, competitiveness and working towards a lower carbon economy,” he said.
On the topic of innovation, Himpe told delegates innovation will drive success, demand and growth: “It is the lifeblood of manufacturing and needs conscious support from the public and private sectors. At any one time, we have around 90 new steels under development for all kinds of industries.”
ArcelorMittal spent around US$270 million on research and development in 2013, around a third of which was dedicated to the automotive industry which is a major consumer of advanced steels. “In terms of how we spend our R&D budget, 39% is targeted on processes, 55% on products and solutions and 6% on exploratory research,” said Himpe.
More than half of ArcelorMittal’s R&D budget is spent on product research. “In fact, our head of R&D tells me steel is innovating faster than mobile phones” he said, adding that today, across the steel industry, carbon dioxide emissions per tonne of crude steel made, are now half what they were 40 years ago, thanks to industry innovations. “And we continue to reduce this figure in Europe in particular, thanks to our team of energy experts.”
Speaking about competitiveness, Himpe said improved competitiveness will come through a mix of internal and external factors. “Internally, we need to continue innovating to make sure we’re offering the best product possible. This requires us to have the best possible employees to innovate and manufacture. We also need to ensure we can compete on cost, and have a strong value chain. Externally, we need a healthy EU economy, to encourage spending and investment, whether it be consumers buying new cars, or governments putting major infrastructure projects out to tender. Investment in infrastructure is crucial for the future of the European economy as a whole, whether it be private or state-backed infrastructure building. The European Commission has also given positive signals, with the call earlier this month for a €300bn package of investment to stimulate the European economy and the reindustrialization of Europe,” Himpe added.
He also emphasized the need for fair trade between the EU and rest of the world: “Free trade is a global issue and we need protection against unfair imports until such time when we have a global level playing field on trade,” added Himpe. “It would be crazy to drive steelmaking out of Europe through inadequate protection for homegrown industry, but we need governments to recognize this, through measures such as harmonizing the energy market in Europe and reducing the very high energy prices.”
On his third point, the low carbon economy, Himpe explained that the European Commission’s low carbon roadmap to 2050 sets out a goal of reducing emissions by 80% over the next 35 years. “ArcelorMittal wants to play its part in a lower carbon economy. But the European Commission’s plans to achieve this goal, as set out in its draft 2030 framework for climate and energy, sets unreachable emissions reduction targets that will lead to a significant decline in European industry. We calculate that ArcelorMittal would have to bear €20bn, or an average of €2bn a year, far exceeding ArcelorMittal’s European profits. This seems to contradict the European Commission’s goal of increasing the contribution of Europe’s industries to 20%.”
Himpe added that “much of ArcelorMittal’s research is focused on lowering our carbon footprint and energy consumption. We also spend a lot of time and resources producing steels that contribute to a lower carbon economy. For example, we’ve designed steel for roofs that also generates clean energy using solar radiation. In the car industry, our advanced high strength steels mean that less steel is needed to make a car part. And don’t forget that steel is the most recycled material in the world – in fact, a third of the steel produced today is made from recycled steel.”
A full copy of the speech is available here or by emailing press@arcelormittal.com
ArcelorMittal spent around US$270 million on research and development in 2013, around a third of which was dedicated to the automotive industry which is a major consumer of advanced steels. “In terms of how we spend our R&D budget, 39% is targeted on processes, 55% on products and solutions and 6% on exploratory research,” said Himpe.
More than half of ArcelorMittal’s R&D budget is spent on product research. “In fact, our head of R&D tells me steel is innovating faster than mobile phones” he said, adding that today, across the steel industry, carbon dioxide emissions per tonne of crude steel made, are now half what they were 40 years ago, thanks to industry innovations. “And we continue to reduce this figure in Europe in particular, thanks to our team of energy experts.”
Speaking about competitiveness, Himpe said improved competitiveness will come through a mix of internal and external factors. “Internally, we need to continue innovating to make sure we’re offering the best product possible. This requires us to have the best possible employees to innovate and manufacture. We also need to ensure we can compete on cost, and have a strong value chain. Externally, we need a healthy EU economy, to encourage spending and investment, whether it be consumers buying new cars, or governments putting major infrastructure projects out to tender. Investment in infrastructure is crucial for the future of the European economy as a whole, whether it be private or state-backed infrastructure building. The European Commission has also given positive signals, with the call earlier this month for a €300bn package of investment to stimulate the European economy and the reindustrialization of Europe,” Himpe added.
He also emphasized the need for fair trade between the EU and rest of the world: “Free trade is a global issue and we need protection against unfair imports until such time when we have a global level playing field on trade,” added Himpe. “It would be crazy to drive steelmaking out of Europe through inadequate protection for homegrown industry, but we need governments to recognize this, through measures such as harmonizing the energy market in Europe and reducing the very high energy prices.”
On his third point, the low carbon economy, Himpe explained that the European Commission’s low carbon roadmap to 2050 sets out a goal of reducing emissions by 80% over the next 35 years. “ArcelorMittal wants to play its part in a lower carbon economy. But the European Commission’s plans to achieve this goal, as set out in its draft 2030 framework for climate and energy, sets unreachable emissions reduction targets that will lead to a significant decline in European industry. We calculate that ArcelorMittal would have to bear €20bn, or an average of €2bn a year, far exceeding ArcelorMittal’s European profits. This seems to contradict the European Commission’s goal of increasing the contribution of Europe’s industries to 20%.”
Himpe added that “much of ArcelorMittal’s research is focused on lowering our carbon footprint and energy consumption. We also spend a lot of time and resources producing steels that contribute to a lower carbon economy. For example, we’ve designed steel for roofs that also generates clean energy using solar radiation. In the car industry, our advanced high strength steels mean that less steel is needed to make a car part. And don’t forget that steel is the most recycled material in the world – in fact, a third of the steel produced today is made from recycled steel.”
A full copy of the speech is available here or by emailing press@arcelormittal.com
