ArcelorMittal SA

COMPANY PROFILE

2015

ArcelorMittal South Africa

www.southafrica.arcelormittal.com | +27 (0)16 889 9111

company profile

The first name in steel production Editorial: Alex Montgomery

If you know anything about steel production in South Africa, or indeed the world, then you have heard of ArcelorMittal and its South African operation, ArcelorMittal SA, regional leader in the industry by a comfortable margin, is responsible for 57% of the continent’s steel production. With sustainable practice becoming more and more of a prevalent issue within the industry, ArcelorMittal SA is leading the way in investments in this area of its business, ensuring an environmentally sustainable future for the steel giant, and providing a benchmark for public and private sector alike.

As a commodity, steel is an essential part of our global society and one of the most widely used metals in our modern world. With a countless array of applications, its versatility, durability and strength lends itself to almost all industry sectors and with over a thousand different grades, steel can be found in everything from the cutlery we use to eat, to the rockets we send into space.

What some may not know is that steel is endlessly recyclable – it does not suffer from degradation and as a result, it can be re-used over and over again; so for every 1,000kg in use, 550kg of that is recycled.

According to the World Steel Association (worldsteel), global steel consumption is expected to grow 0.5% in 2015 to a staggering 1,544 Mt, with growth being mainly driven by the developing

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economies of BRICET countries: Brazil, Russia, India, China, Eastern Europe and Turkey.

As the well-established world number one steel producer with around 232,000 employees, ArcelorMittal, as a group, is the largest producer of steel in Europe, North America, South America and Africa and the second largest in the CIS region with growing presence in Asia, particularly China.

ARCELORMITTAL SOUTH AFRICA As part of the global steel powerhouse, ArcelorMittal South Africa is the foremost steel producer on the African continent, with a production capacity of 6.5 million tonnes of liquid steel per annum. Through its association with the global entity, ArcelorMittal SA has access to industry-leading R&D, best practice processes, international market leverage and

ArcelorMittal South Africa

aggressive procurement contracts, giving it a strong foundation that puts it in an unshakeable number one position ahead of its competitors.

Headquartered in Vanderbijlpark in Gauteng, the company has an annual steel production of 5.0 million tonnes of liquid steel (long and flat) products, over 9,000 employees and a revenue of R32 billion (2013).

To get an idea of just how significant ArcelorMittal SA is locally – it currently provides over 57% of domestic steel requirements in South Africa and is a major supplier to the region’s domestic industries, with the majority of supply (71%) going towards construction, automotive, energy, mining and chemical and water sectors. As such a major industry supplier in the region, the company currently indirectly supports 9.7% of GDP and around 900,000 jobs.

LOOKING BACK ArcelorMittal SA has been in existence in South Africa for over 80 years, originally starting life as the statutory parastatal organisation, Iscor, in 1928.

The first steel was tapped from the open-hearth furnace at the Pretoria works in 1934, and the rest, as they say, is history.

Increased demand and a number of mergers, acquisitions and expansions that have taken place over the years have served to propel the company towards the leading position it is in today. The most notable of these earlier expansions would be the Plate Mill and Fully Integrated Steelworks expansions at Vanderbijlpark in 1943 and 1947 respectively and the investment into an Integrated Steelworks site at Newcastle in 1971.

The company’s huge Saldanha Steelworks first started production in 1999 and is the result of a

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company profile

joint-venture established with the IDC in 1996.

Following the acquisition of the parent company in 2004, the merged company’s name was changed to Mittal Steel Co in 2005 and a further merger between Mittal Steel and Arcelor Mittal South Africa was the final evolution that resulted in the company we see today – ArcelorMittal SA.

TRANSFORMING TOMORROW The modern-day ArcelorMittal SA, is a company very much concerned with a sustainable future for steel production – not only from a cost-saving perspective, but an environmental one also. Currently, the company’s annual electricity consumption stands at 3,736,000 MWh per year and annual water consumption at 15.500 Mlt. Worldsteel has highlighted the need for sustainable practice across all areas of the steel industry, and as an industry leader in this field, ArcelorMittal mirrors this sentiment and is very much concerned with steel’s contribution to a low carbon society and the need for stronger partnership between government and the

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leading players in the steel industry.

Edwin Basson, Director General of worldsteel explains further what the organisation and its industry leading members are concerned with for the future of the global steel industry: “The steel industry is CO² and energy intensive by nature but what needs to be clearly acknowledged is the central role it plays in enabling many other industry sectors to mitigate CO² emissions in their applications and products and also in providing solutions to many of the challenges posed by a growing global population.

“Therefore, the role of the steel industry needs to be considered within the context of progressive industrial policy and governments need to engage with the steel industry when developing a carbon policy that could impact the industry.

“Governments should take into account the full life cycle of products when creating new regulations. This will help to create reliable and predictable frameworks for cost effective energy and environmental policies. Furthermore, governments should promote a circular economy approach leading

ArcelorMittal South Africa to: low waste, reduction in the amount of materials used and encouragement of reuse and recycling of all materials. Lastly, progress in breakthrough technology development in steelmaking must be maintained or accelerated requiring the financial burden to be shared by both government and the private sector.”

In order to live up to these aspirations, ArcelorMittal SA has embarked on a program of education and investment over the past five years to bring its practices in line with what it perceives to be the future of steel production and sustainable practice, under the slogan of ‘Transforming Tomorrow’.

With such focused investments being actioned for infrastructure development in South Africa and across the continent, steel is a vital commodity in this and one of the biggest challenges facing the industry is being able to meet demand, while also minimising environmental impact and cost.

producing companies, and any improvements in efficiency have paralleled environmental and financial benefits. Improvements in energy efficiency result in reduced production costs and thereby improved competitiveness.

Steel production is very much an energy intensive process; however, innovations in sophisticated energy management systems are ensuring efficient use and recovery of energy throughout the steelmaking process for reuse, wherever possible.

In fact, improvements in energy efficiency and technology have led to reductions of around 60% in energy required to produce a tonne of crude steel since 1960 in most of the top steel producing countries.

ArcelorMittal SA operates in line with global group environmental policy and as such, all production facilities comply with ISO 14001, the internationally recognised standard for environmental management systems. The company aims to be among the world’s lowest cost producers.

ENERGY USE IN THE STEEL INDUSTRY Ranging anywhere between 20% to 40% of the final cost of steel production, energy constitutes a significant portion of the expenditure for steel

EFFICIENCY AT SALDANHA One area of the business in which ArcelorMittal SA has invested significantly since the start of its

Group of Companies

Mobile Crane Hire 8 – 550T; CAD 3D rigging studies; Specialised Transport Newcastle – 034 375 8673 Rustenburg – 014 5967440 Welkom – 057 3964138 Port Elizabeth – 041 486 1070 Richardsbay – 035 7511798 Saldanha – 022 7143534 Secunda – 017 6323879 Durban – 031 466 5411

LIFTING South Africa

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company profile

“You need to train people - a good technical person still needs to be trained in energy savings�

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push to become a more efficient, sustainable, organisation is at its Saldanha Works facility in the Western Cape. A largely export-focused plant, Saldanha Works employs over 550 staff, has a capacity of 1.2 million tonnes per annum and is the single largest electricity consumer in the Western Cape in its production of ultra-thin hotrolled steel coils.

As such a huge consumer of energy, and subsequently a drain on finances, Saldanha was an obvious choice for upgrade as part of the company’s energy management strategy, launched in 2010. With potential savings initially identified through an energy audit and an examination of its existing project list, an ISO 50001-compliant energy management system was initiated which cut energy use at the facility by 6.6% a year.

By showing such commitment to sustainability and introducing a world-class manufacturing programme optimising energy management at the facility, Saldanha has gone from being one of the

ArcelorMittal South Africa

Group’s highest production cost factories to one of its lowest cost ones.

According to a case study conducted by the United Nations Industrial Development Organisation, even without any further investment in the facility, the changes made so far will mean a saving of R362 million for ArcelorMittal SA by 2016.

Dhesan Moodley, General Manager at Saldanha Works, says: “Resources were allocated both in terms of people and capital expenditure. Initially the potential was determined through an existing project list and doing an energy audit on the plant to determine further possible savings. ISO 50001 was implemented and energy management is now part of our daily routines. The energy saved in terms of baseline value of 160 MW was 10.6MW or 6.6% and the LPG savings added equivalent of R90 million in 2012.

“This has proved to be sound technology given the correct application. We are also very proud of

our waste heat project at the Roller Hearth Furnace where waste heat was used to replace a diesel heater at the Air Separation plant. We have also done some optimisation projects at the water plant on pump systems that required no capital expenditure.

“You need to assign resources if you are really serious about energy savings. You need to train people – a good technical person still needs to be trained in energy savings and the NCPC/ UNIDO program (supported by the DTI and DOE) is really an affordable way to train your staff to think and implement energy savings initiatives. Introducing savings is relatively easy. Sustaining these savings can be quite difficult especially if it is achieved by changing human behaviour. You need to incorporate it in your management infrastructure and implement a system such as ISO 50001 to entrench and sustain such savings,” explains Dhesan.

Distinguished by its merging of cutting edge technologies to produce its high quality ultra-thin

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company profile hot rolled coil (UTHRC), the plant is a pioneer in the industry and the only steel mill worldwide to have successfully combined the Corex/Midrex process in a continuous chain – essentially replacing the need for coke ovens and blast furnaces and making the plant an industry leading example for emission control and environmental management.

Much of this UTHRC product ends up being used for roofing in Africa and the company plans to invest further in the facilities in 2016 to allow the possible tie-in of gas to the iron-making part of the steel process and further contribute to its ability to produce a finished product with virtually no impurities.

The savings for the plant and the company will not only increase competitiveness and profitability, but also buffer ArcelorMittal SA against rising energy tariffs locally and the impending implementation of a carbon tax: “We are focused on the export market, specifically in Africa and we are competing against China and India. These countries do not experience any of the cost increases mentioned. The viability of

export facilities is at risk with these increases.

This obviously has significant potential impact on the economy, not just local, but also on the fiscal balance.”

ArcelorMittal SA is ensuring that, in keeping with its reputation as an industry leader, it preemptively takes steps to ensure it is ready for the increasing drive globally towards sustainable business practices.

It is a company unafraid of making the investments needed to ensure its future, a huge company with the ability to be flexible in response to the fluctuating demands of the steel market; embracing sustainability is just one example of this formidable company’s future focus.

With a depth of technical and managerial expertise, an unparalleled reputation for reliability in the global arena and a strong culture of innovation, ArcelorMittal SA is the cornerstone of African steel production and a company that will long continue to be a yardstick for both public and private interests in the steel production industry

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Terex MHPS integrates combined company strengths under one brand Demag Cranes and Components is a name synonymous with providing expert material handling solutions across Sub-Saharan Africa. As of July 2015, Demag Cranes and Components (Pty) Ltd officially changed its name to Terex MHPS (Pty) Ltd (Terex Material Handling and Port Solutions), as part of a global integration and business legal entity simplification process within its parent company, Terex Corporation.

Part of the name change involved the integration of Terex Material Handling (formally Demag Cranes and Components) and Terex Port Solutions (formerly Terex Port Equipment Southern Africa) into Terex MHPS (Pty) Ltd. According to Terex MH Senior Manager Sales, Richard Roughley, the restructuring and rebranding has resulted in a company that offers complete intermodal handling solutions.

“By combining the full expertise of both companies under one roof, Terex MHPS offers a more comprehensive and synergistic portfolio of solutions that can be tailor-made specifically to each individual customer request. I am confident that this will enhance the high level of service and quality that our customers have become accustomed to over the years,” he explains.

Further synergy will be created, thanks to the fact that Terex MHPS will have greater access to other leading Terex brands such as Genie Aerial Work Platforms, Terex Mobile Cranes and Terex Finlay. The regional head office of Terex MHPS, which boasts a 54 000 m2 manufacturing facility with over 200 employees, will remain in Boksburg, Gauteng.

“One of our key areas of focus will be the Sub-Saharan African countries, whose economies are growing at a healthy pace. With the countrywide network of Terex branches and a growing network of cross-border agents, we can ensure improved support for all our products to the benefit of our customers,” Roughley concludes.

To find out more about the Terex MHPS rebranding call 011 898 3500 or email enquiry.sa@terex.com

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