ANNUAL REPORT ARCELOR 2003 - paperJam

3.3. Packaging steelsThe packaging steels business is handled by ArcelorPackaging International (API), a dedicated businessunit. API is the world leader in steels for the packagingindustry in terms of both volume (11% share of theworld market) and the technological sophistication ofits applications.API is number one in Europe with 37% market share(representing 85% of its production) and benefits fromgood distribution of production and sales throughoutthe continent.API supplies packaging manufacturers with steelproducts tailored to their various markets: food products(50% of the European consumption of packaging steels),beverages, cosmetics, paints and industrial products.The applications are many: beverage cans, shapedcans, 2 and 3-piece cans, caps and crown corks, topsand easy-open tops, aerosols, industrial cans anddecorative packaging.2003 was marked by the disruption in the beverage canmarket with the introduction in Germany of a depositon non-reusable packaging. The beverage can marketcontinued to grow in the other European countries,particularly in Spain and the countries of Eastern Europe.Steel consumption in the other steel packaging segmentswas varied: an increase in aerosols and closureapplications, a decline in industrial applications, andstability in food products.API was able to maintain its market share in Europe inthe context of a complex situation for the industry as awhole.API has three production centres. Two service centreslocated in Italy and Turkey and a varnishing (printing)unit complete the organisation.The production sites have developed specific know-how.The expansion of API resulted in splitting the productionfor the major applications between North and South withthe aim of optimising logistics, while niche productionwas concentrated in a single specialised plant.In 2003, Arcelor commissioned a new wide line for steelfor beverage cans at Avilés that will make it possible tosupport the growth of this market in Southern Europe.In a mature market threatened by competing materials,the strategy of Arcelor Packaging International is toincrease its own profitability as well as the profitabilityof the segment by defending its position and, togetherwith its customers, promoting the use of steel forpackaging by launching new products on the market.API is listening to the needs of the players throughoutthe entire supply chain, including designers, bottlers,brands and distributors.The new generations of packaging steels resulting fromArcelor innovations should also contribute to increaseduse.A new continuous annealing line rapid-cooling process,commissioned in 2002, is an additional step in packagingweight reduction for easy-open top applications.Steel products with super deep-drawing qualities willallow the development of new applications primarilythrough the reduction in the number of deep-drawingpasses (e.g. small 2-piece formats, for fish cans).New developments in co-extrusion (deposition of a PETor PP film on one or both faces) will soon allow us tooffer pre-coated steels.API is also heavily involved in food safety and recyclingissues. In fact, steel has a number of advantages inthese two areas and API has opted to reinforce itsleadership position by adopting a proactive stancewith regard to national and European regulations.44ANNUAL REPORT ARCELOR 2003