A European aluminum producer boosts capacity by 50 percent and becomes more sustainable with high recycling rate

November 2017 - From durable sprockets for mountain bikes to air cargo containers, or vehicle chassis to interior decor, aluminum rolled and cast products find thousands of applications. In response to burgeoning demand from a host of end markets, one of the most versatile producers in the world is getting bigger.

At its Ranshofen complex in June,  Austria Metall AG (or AMAG) started up a six-high cold-rolling mill, a heat treatment line with integrated passivation, annealing furnaces, a slitting line, a packaging line and a high-bay coil storage area. All the equipment is new and automated in order to obtain high quality and meet narrow tolerances for material characteristics and dimensions, says Chairman and CEO Helmut Wieser.

The €300 million expansion project effectively increases AMAG’s cold rolling capacity by 50 percent. The aluminum company’s “continuous rolled production capacity has more than tripled during the past 20 years, from 60,000 metric tons to 200,000 MT,” says Wieser. With the added investment, AMAG can produce 300,000 MT of sheet and plate per year from Ranshofen.

Even as the ramp-up was occurring, AMAG’s first-half 2017 shipments rose 4 percent from the same 2016 period to 215,000 metric tons, and revenues jumped 16 percent to €535 million. The sales bounce largely reflected a similar escalation in aluminum prices.

Satisfaction guaranteed

With the new cold mill, heat treating and annealing lines, AMAG has been able to expand its product portfolio. “We can now roll up to 2300mm wide (90.55 inches) and 155 mm thick (6.1 inches),” says Wieser. “We increased production capacity because we were always running full. Now we can satisfy our customers—and we added customers in the last year—because no one wants to buy less; they all want to buy more from us.

“This was a major reason for expanding,” he continues. “We need to satisfy  demand. We cannot tell customers that we are fully booked. We need to offer good lead times.”

As the world economy continues to grow, “85 percent of our product leaves Austria so we are global,” according to Wieser.

In terms of versatility, “we have new formats, especially for automotive, aerospace and packaging. These include wide, thick material and double the size of slabs. We don’t stop here,” he stresses. “We plan ongoing investments in mechanical processes. Because of customers’ wishes, we will install a contour cutting line for aluminum plate and a new wide-sheet cladding line for making multilayer compounds,” Wieser says. This cladding material is used for building panels as well as for corrosion-resistant aluminum compounds used in heat exchangers. The material typically used in such applications was copper, “and now it is 100 percent aluminum. That is another product substitution.”

Human resources

As part of its strategy to widen its influence and become the keystone supplier to a variety of global OEMs like Boeing and Airbus, Fiat Chrysler Automobiles N.V. and Renault-Nissan, AMAG is hiring specialists, tapping the brainpower of its entire workforce and enhancing internal processes.

Employees in Austria hold more than 11 percent of AMAG’s shares. “We pay dividends to all active employees every year so they have a stake,” says Wieser.

“We work on continuous improvement, but we also had 12,800 suggestions from our employees in 2016. That number is increasing every year. We have 30 suggestions implemented per day.”

The company has hired 300 people since the expansion program got under way, including specialists in the areas of  technology, R&D, production and sales. There is competition for talent, says Wieser. “Many other companies in the region are also making investments and they also need highly qualified people. In the next couple of months, it will become harder to find them but we are well set.”

New equipment includes a six-high cold rolling mill, a heat treatment line with integrated passivation, annealing furnaces, a slitting line and a packaging line.

AMAG employs about 100 researchers—“many of them with PhDs from university.” The company reaches into academia to recruit talent.

“They start their careers with us. They come to us with their doctoral thesis related to the industry and product, whether it’s aerospace, automotive or packaging, and they are already working for us while pursuing their advanced degrees. Most of the time they stay with us,” he notes. “We work with many universities and with trade associations. We have a system to develop talents and to retain them.”

Strengths and opportunities

Besides its competent and motivated workforce, Wieser says AMAG is now able to bring its modernized manufacturing capabilities together with innovative methods for process and material simulation.

The company’s strengths lie in having two independent production streams–each with foundries and hot- and cold-rolling mills focused on optimizing reliable deliveries and offering greater flexibility to the downstream supply chain.

A key pursuit for AMAG, as it seeks to offer sustainable and environmentally sensitive solutions, is closed-loop recycling. The processing, melting and casting facilities required for this purpose represent the latest available technology and guarantee that all common types of aluminum scrap are recycled.

The company recycles aluminum from its customers, among other sources. Recycling uses 95 percent less energy compared with primary aluminum production. The closed-loop system secures supply and is beneficial for both parties involved. Between 75 and 80 percent of AMAG’s foundry production comes from recycled metal.

More to come

Wieser outlined a few goals for the near-term future. “The big challenge is qualifying these new investments for aerospace and automotive certifications. You have to qualify in the packaging industry, too.”

AMAG already holds numerous certifications and accreditations for a wide range of end-use applications. However, “If you have new equipment, you have to earn the qualification again. With our wider sheet and thicker plate, the customer must run the material through their qualification programs.”

This is especially true “for the automotive and aircraft customers in North America and Europe. It is a big task,” Wieser says.

To date, he says, “We have hundreds of products and we are gaining experience with the new rolling mill. As we broaden the product range, we develop new procedures and standardize them. Then the task is to sell and produce to customer specifications.”

Risk management

One recent advancement for AMAG has been acquiring the technology to model outcomes. “You no longer have to go through the mill for every product attempt. We do it in simulation first,” Wieser explains.

Additionally, customers want to feel confident they will get what they need when they need it, no matter what. “With the two hot mills and with two cold mills, we can mitigate risk,” he notes. Further downstream, “we have three heat treatment lines and three stretchers so that if we have force majeure on one line, we will run the other mill and supply our customers.”

AMAG has “an unbelievable product: High strength, good looking, infinitely recyclable. And it’s lightweight. For the new CAFE regulations, we have products providing a good CO2 footprint,” says Wieser.

This includes a smelting capacity in Sept-Iles, Quebec, which is served by hydroelectric power. “Long-term customers want to see a secured supply base for primary material and a low-carbon footprint in smelter production.

“All these things combined make us confident for the future,” Wieser concludes. With the will, skills and investment lined up, “we are now ready for growth with our customers.”­ MM