Annual Report 2001 - Bohler Uddeholm materializing visions

Segment Reporting
policy and the amount of unit volumes produced,
but the US automotive industry was significantly
weaker.
BÖHLER-UDDEHOLM special grades such
as electro-slag remelting steels, vacuum induction
melted steels, and powder metallurgy
steels enjoyed excellent demand on markets
across Europe, America and Asia in 2001.
Demand was driven primarily by a boom in
the energy industry and, up to the tragic events
of 11 September, high sales to the aerospace
industry.
In spite of the weak operating environment,
BÖHLER-UDDEHOLM was able to maintain
its share of the market for special steel
long products in the USA and to further expand
in Europe and Asia. In the tool steel and special
grades segments, the Company was able
to increase market share in both Europe and
the USA. Average prices for special steel long
products remained generally stable during the
reporting year. Volume sales exceeded the
prior year level for the first half of 2001, but
declined during the second six months. Sales
in the Special Steel Long Products Division for
2001 therefore reached the good prior year
level. Earnings fell slightly below the prior
year value, however.
It should also be noted that the US government
introduced measures to protect the domestic
steel industry (”Section 201“) in 2001.
It is feared that the administration of President
22 BÖHLER-UDDEHOLM Annual Report 2001
George W. Bush will establish import restrictions
in the form of quotas and/or protective
tariffs. At this time, it is not possible to estimate
the potential effect of such measures on BÖH-
LER-UDDEHOLM special steel long products.
SALES NETWORK.
A major competitive advantage for
BÖHLER-UDDEHOLM is the Group’s sales and
distribution network. It enables the Company
to react quickly and flexibly to the needs of
customers on site, and to provide customers
not only with steel but also services and technical
know-how. The sales and distribution network
was enlarged during the reporting year
through the acquisition of local steel traders
in a number of countries. New facilities for
machining and heat treatment served to extend
the value added chain to customers. For example,
a flexible capacity hardening plant for
special grades was installed in Austria and
heat treatment facilities were also expanded
in China and Canada.
CAPITAL EXPENDITURE.
New electro-slag remelting equipment
was installed in Kapfenberg (Austria) and
Hagfors (Sweden). The Group now has a total
of 12 such plants, which produce roughly
40,000 tonnes of ultra pure electro-slag remelted
steel grades per year. At Mürzzuschlag
(Austria), corporate spending focused on the
new TRIO rolling line. This equipment forms
the core of production for high-alloy steel plate
and nickel-based alloys at Böhler Bleche
GmbH. At Hagfors, the capacity of the heat
treatment equipment was enlarged. Böhler-
Uddeholm Specialty Metals (USA) invested in
a new finished goods warehouse to optimize
logistics.
RESEARCH AND DEVELOPMENT.
Activities in this area focused on efforts
to meet customer demands by developing new
materials. In particular, this involves the improvement
of quality characteristics such as
higher purity, polishing qualities, optimized
dimensional accuracy, and higher endurance
and resistance to wear. Development also
places considerable emphasis on anticipating
customer trends and providing appropriate
grades of steel.
Research and development is placing increased
focus on new processes such as hydroforming.
This technique uses a shaping medium
such as water to manufacture tool forms with
highly complex profiles. Computer simulation
programs are also becoming increasingly popular
for the production of new steel grades and
alloys or the calculation of shaping processes.
The primary objective is to develop and market
new products in the shortest time possible.
One particular success during the reporting
year was the introduction of vacuum-melted
plates with nickel-based alloys.