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Outokumpu to Invest in Special Grades at Avesta in Sweden

09/18/2007 - Outokumpu will invest EUR 550 million over the next three years to install a new AOD converter, increase the current melt size, and add a new slab grinding line at its Avesta Works in Sweden.

Outokumpu has announced a EUR 550-million investment, over the next three years, in stainless steel special grades capacity in its Avesta Works in Sweden. The investment will increase the finished products capacity of Avesta from the current 250,000 tons to some 650,000 tons with mainly duplex grades, starting in 2010. Outokumpu estimates a return on capital employed from the expansion that is clearly higher than the Group's 13% target. The expansion will create some 100 new jobs in Avesta.

Duplex stainless steels are characterized by good corrosion resistance and high strength, as well as low nickel content.
 
Their high material strength enables the use of thinner gages in a variety of applications such as tanks, pressure vessels, piping, transportation, civil engineering and structures, thus bringing considerable savings in material costs.

Outokumpu developed and patented the Lean Duplex grade (LDX 2101®) which contains only 1.5% of nickel—making its price less dependent on the volatile nickel price. LDX has a corrosion resistance that is similar to that of the standard austenitic 304 grade, but its strength is about twice as high. Introduced in 2002, Outokumpu's Lean Duplex has met with great success in demanding applications. To further facilitate the market penetration of Lean Duplex, Outokumpu has earlier this year awarded manufacturing licenses to two other stainless steel producers in Europe and Asia.
 
In support of the group’s move into a new phase in its strategy development, its investment in Avesta includes a new AOD converter, an increase of the melt size (from 100 to 125 tonnes) and a new slab grinding line, increasing the meltshop’s annual capacity to some 750,000 tonnes from the current 500,000 tonnes. The investment also includes a new state-of-the-art 400,000-tonne, 2-meter wide annealing and pickling line with integrated edge trimming. The Avesta hot rolling is well suited to roll duplex grades and has the capacity to treat the expanded meltshop capacity. Finished product is annealed and pickled white hot strip that will be sold mainly to direct end-user and project customers.
 
With a global market share of some 50%, Outokumpu is a recognized market leader in duplex grade stainless deliveries, and its Avesta Works has a long and successful track record in the demanding production process of duplex.