Strategic thinking

By Corinna Petry

Above: AMAG put in a second hot rolling mill at its Ranshofen, Austria, aluminum mill complex. A heat treat facility will open in 2017.

Following major customers’ footprints, Austrian aluminum producer is keen on North American expansion

November 2016 - An aluminum producer based in Ranshofen, Austria—immediately across the Inn River from Germany and less than 60 kilometers north of Salzburg—has been expanding capacity, shipments, revenues and profits for a couple decades now and the current phase is powering up in North America.

One might wonder where AMAG (Austria Metall AG), which shipped 206,300 metric tons during the first half of 2016, fits in with giants like Alcoa, Constellium, Aleris and Novelis. Chairman of the Executive Board and CEO of the company, Helmut Wieser, doesn’t worry about that.

“We have been in an expansion mode for the last 20 years,” he says. In 1995, AMAG produced about 60,000 metric tons of rolled products and last year, 175,000 metric tons. “Everything is already under way to expand to 300,000 metric tons.”

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AMAG’s product was chosen to decorate a highly visible luxury restaurant in Vienna.

In 2014, AMAG started up a second hot-rolling mill, a plate production center, and expanded its cast house and its recycling capacity, Wieser says.

“Slab is our material going into the rolling mills.” Between 75 and 80 percent of the molten metal is from recycled aluminum, which Wieser claims is a higher percentage than competing remelters. 

The second hot rolling mill produces a wider and heavier gauge product: Sheet and plate can be up to 6 inches thick by 90 inches wide. “For tread plate, we go up to 82 inches wide,” says Wieser.

Beyond that stage, AMAG will add wide cold rolling mills and a continuous heat treatment line for coil. The wider material is what customers in aerospace, automotive and other sectors want. “We can offer more capabilities based on the width,” says Wieser, adding, “It is a mitigation risk for the customer to have two large hot rolling mills and two large cold rolling mills.” By doubling production, there is pretty much a zero chance AMAG would miss a promised delivery. 

The second cold mill and heat treatment facility will be fully operational next year. In all, AMAG has invested €520 million in the accumulated projects.

The company exports about 85 percent of its volume; 50 percent is consumed by Western European customers, 25 percent goes to North America and 5 percent is shipped to Asia.

“We have been exporting to the United States more than 25 years and we continuously increase that,” Wieser says. 


One part of AMAG’s global footprint lies in Sept-Iles, Quebec, at the mouth of the St. Lawrence River. That is where Alouette Aluminerie produced around 600,000 metric tons of ingots last year. The largest smelter in North America is co-owned by Rio Tinto, Marubeni Metals & Minerals Canada, Hydro Aluminium, AMAG and the provincial government (Investissement Quebec). AMAG takes 20 percent of the output and “most of the product is shipped to the American market. We barely bring any metal to Europe,” says Wieser.

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The additional hot and cold rolling equipment mills support the production of heavy-gauge aluminum, with plate being as thick as 6 inches and up to 90 inches wide.

This partnership has been beneficial on several levels, he says. “Many other smelters closed down in Canada and the U.S., which makes Alouette even more important to our future.”

The partners secured a new electricity contract last year, effective in 2017 and which won’t expire until 2029. It will tie the kilowatt rate to the spot price of aluminum, which helps improve both the cost position and risk profile in relation to fluctuating LME prices and currency exchange rates. Based on hydropower, the long-term contract also gives Alouette “a minimum carbon footprint” among competing smelting operations globally, according to Wieser. “It has set worldwide benchmarks in energy efficiency and cleanliness.”

There are plans on the books to boost Alouette’s capacity, but “because of low aluminum prices, this is not the right time to decide. When the opportunity arises, we have prepared the ground for it,” Wieser says. All five partners must agree to any such capital project. 

Market diversity

“We are proud to serve Boeing [Co.] in sheet and plate,” Wieser says. “We are also the certified supplier to the automotive industry, including Audi, BMW, Daimler-Mercedes, General Motors, Fiat Chrysler and Porsche. And we sell to tier I suppliers like Magna International, stampers and automotive service centers.”  

The company also rolls architectural product. Northwestern University’s Kellogg School of Management will open a 410,000-square-foot education center this winter on the shores of Lake Michigan in Evanston, Illinois. The façade features AMAG aluminum.

“All the heat treatable alloys are specialty products from our plant. This means skin sheet and plates for aerospace, auto body sheet and structural—crash management—applications, brazing sheets for coolers and heat exchangers, and very bright material for automotive trim,” says Wieser. “Get into an Audi or BMW and you’ll find good-looking trim.” Demand for anodized and strong, perfect surface aluminum has been growing, he notes.

“We have another automotive product, AMAG TopForm, which is made for super plastic forming processes. This is a special product with a very fine grain structure.” It’s especially used for complex geometries and for high-end luxury vehicles like the Bentley.”

Based on its expanded capabilities in Ranshofen, “the wide sheet, wide plate and thick plate are entering the U.S. market,” says Wieser, noting that demand for these products “is good.” AMAG is also “producing marine grades, which were often a challenge due to the previously limited width.” Applications include tankers and dump bodies as truck builders adopt lightweight materials to meet more stringent fuel economy standards.

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Gerald Mayer, CFO, left, Helmut Wieser, CEO, and Helmut Kaufmann, COO, lead AMAG, remelter and roller of specialty grades of aluminum for aerospace, architectural and automotive applications.


Employing the right processes and products, even a medium-sized company like AMAG (first-half 2016 revenues were €461.4 million) can be a valued supplier with a global footprint. 

“We are a public company. We have stable shareholders in a stable country. Many customers are very happy to count on our quality and delivery. We are not in commodities. Customers and shareholders can see we have sustainable growth. We have paid dividends in each of the last five years,” Wieser notes.

AMAG will also seize upon every metallurgical and process technology development that makes economic sense. “We have 100 employees in R&D, many of them Ph.D.s,” he says. “We also have local application engineers in the U.S.”

As a partner to automakers like GM, Daimler and Audi, which “have plants all over the world,” AMAG is poised to roll and ship what they need. “The latest development is producing C-class Mercedes in the United States. They developed technology in Europe and are deploying it worldwide,” says Wieser.

By being adaptable, AMAG has proven itself with “a high proportion of specialty products compared with other aluminum producers.” He cites the production of heat treat plate and sheet for automotive and aircraft from a single location. “[Peers] produce either automotive or aerospace. Very few do both. That is a good crossover,” says Wieser, especially because “automakers are asking for aerospace quality product. So what we have done gives us synergies.” MM

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