Siemens Sees Increasing Investment Leading Transformation of Russian Steel Plants
02/07/2011 - Siemens VAI Chief Executive Werner Auer comments on recent increases in steel production in Russia, as well as increased investments to expand and enhance existing steelmaking capacity.
Russian steelmakers are making up for the collapse of production of 2009 that resulted from the worldwide economic crisis.
“2010 saw an increase in the steel production again almost to the level of the record-breaking year 2008, and the companies have started again to increase their investment in the expansion and enhancement of their production,” explained Werner Auer, CEO of Siemens VAI, to Russian media in Moscow on Friday.
Auer said he has observed an ‘increased demand for new technologies’ to be used primarily in new plants or in the context of modernization. The goal is to increase the efficiency of steel production and to improve the quality of the products.
“Contrary to many other steel nations, Russia has its own raw materials and energy,” said Andreas Lemp, responsible manager for the systems business in Moscow. “This puts Russia in a good position to become a cost leader in production also in international competition.”
Russia currently ranks fourth in the world for export, as well as for production after China, Japan and the USA. According to Auer, it can be expected that the Russian market for steelmaking plants and components will grow from today’s 770 million Euro to more than 1.1 billion Euros within the next four years. The expansion of production capacities goes along with transformation and technological modernization. “This is because Russian steel producers will better utilize their raw material, save on energy costs, and fulfill stricter environmental regulations. Russia will also increasingly produce more sophisticated products, for example for household goods and the automobile industry,” said Auer.
Expansion of the Russian steelmaking industry means that existing steel plants will need to be modernized and enhanced. At the same time, demands in secondary metallurgy will grow, while rolling mills will have to produce better surface qualities and steelworks will have to put out higher steel grade. All of this will also require more automation and electronics. “In future, our business in Russia will be shaped by further developing existing plants to fulfill these requirements,” said Lemp.
At the same time Siemens notes in the plant construction business an increasing number of competitors. “Chinese companies are already offering their services for big projects in Russia,” Auer noted. Technologically the focus is on coking plants, blast furnaces, sinter plants and to a certain degree on steel plants. “As a European technology provider, we have to further develop our abilities in regard to engineering, design, modernization and lifecycle services. “ In doing so, Siemens will build upon its worldwide leadership position in vertical as well as horizontal integration of steelmaking plants in order to strengthen the international competitive strength of the Russian plants.
Basis for this is Siemens’ strength in vertical integration competence over the entire product range, mechanical engineering, media, technology, electrical engineering, drive systems, and automation. “With our vertically closed competence we will dramatically improve technologies. I am also convinced that on the mechanical side, thanks to our strategy of manufacturing core components in our own high-performance workshops and with our mechatronics advancements, we will develop new products,” Auer stated. “Through our platform technologies in electronics and automation solutions, we are very competitive in providing complete systems. For large facilities we take over all responsibility and offer the full range of products and technological solutions from a single source while most competitors have to buy and insource.”
Auer considers this broad portfolio not only a product of more than 50 years of partnership relations with metallurgy, but also a basis for continued collaboration and positive economic development. “We are working to strengthen our local presence at the steel sites with Russian engineers and service staff in order to drive the developments in steel production together with our customers. Because high tech and innovations from Europe will continue to drive developments in the iron and steel industry,” Lemp concluded.
The Siemens Industry Sector (Erlangen, Germany) is a leading international supplier of environmentally friendly production, transportation, building and lighting technologies. The Sector comprises six divisions: Building Technologies, Drive Technologies, Industry Automation, Industry Solutions, Mobility and Osram. With around 204,000 employees worldwide (September 30), Siemens Industry achieved in fiscal year 2010 total sales of approximately €34.9 billion.
The Siemens Industry Solutions Division (Erlangen, Germany) is one of the world's leading solution and service providers for industrial and infrastructure facilities comprising the business activities of Siemens VAI Metals Technologies, Water Technologies and Industrial Technologies. Activities include engineering and installation, operation and service for the entire life cycle. With around 29,000 employees worldwide (September 30), Siemens Industry Solutions posted sales of €6.0 billion in fiscal year 2010.
