Steel plants’ longer life fuels modernisation business

Auer: We can ensure flexible and competitive operation of plants for service lives of 50 years and more

Werner Auer, CEO of Siemens VAI, told international media in a press conference in Kolkata, India on May 11 that in the future, steel plants would be operated for longer than before and might well run for over 50 years while having to meet new requirements on energy efficiency, safety and environment protection.

“Extending operating periods in this way is technically possible and makes economic sense, but requires continuous plant modernisation,” explained Auer, adding that it would become increasingly important to modernise and upgrade existing plants in order to enable production of new steel grades and material properties, especially for countries with a rising demand for consumer goods such as India and China.

“Besides new construction business, we’re now expecting stronger demand for modernisation and service in the period following the economic crisis to further optimise operating procedures and individual processes in the steel plants”, said Auer.

According to Siemens VAI reports, since the world market recovery in 2010, demand has been growing for steel and for plants to produce high-quality steel grades, while rising raw material and energy prices and tighter environmental requirements are posing new challenges for steel producers.

As Auer observed, business for modernising and optimising existing plants was growing faster than business with new plants, the company had systematically expanded its portfolio for this market with technical innovations and modular system packages that increased the productivity of steel plants.

“By optimising individual components and processes in steel production and integrating them into the production process, we can ensure flexible and competitive operation of plants for service lives of 50 years and more”, Auer said.

Siemens VAI has been reportedly quick to adapt its capacities to global market trends, successfully consolidated its structures by creating competence centers in Europe and has continued to expand its presence in China and India by building up local engineering and production capacities.  In India specifically, it is concentrating on developing and producing new components for steel production, whereas in China the focus is on products for the casting segment.

“The decision taken in 2009 to establish development know-how and production capacities for new steel plants components in China and India has put Siemens VAI in a position to tap into new markets with a volume of over five billion Euros that cannot be served from Europe”, claimed Auer.

In 2010, the world market for steel production plants relevant to Siemens VAI reached some 21 billion Euros. In the coming years the company expects an annual market growth with rates in the mid single-digit percentage range, driven especially from China and India with values of up to 7 per cent.

“More than ever before, we’ll be manufacturing components for steel plants ourselves and setting up new factories in China and India,” announced Auer.