Annual Report 2014 - Sms Innse · 4 SMS group Annual Report 2014 EXECUTIVE SUMMARY The development...

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Annual Report 2014

SMS groupCorporate Communications

Eduard-Schloemann-Strasse 4 • 40237 Düsseldorf • GermanyPhone +49 211 881-4127 • Fax +49 211 881-4386

[email protected]

Internet: www.sms-group.com

FIGURESof the SMS group

Order intake by Business Areas in million EUR1)

2005 200720060

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2013 201420112010 2012

Figures in accordance with International Financial Reporting Standards (IFRS)1) Including Other/Consolidation.2) Year average with apprentices/other.3) Due to the initial consolidation time of December 2012, the annual average

of Paul Wurth is only one twelfth of the overall value for the year.

SMS group in million EUR1) 2008 2009 2010 2011 2012 2013 2014

Total order intake 5,288 2,341 2,931 3,423 2,835 3,309 3,167

of which Business Area SMS Siemag 3,870 1,479 1,892 2,007 1,519 1,708 1,595

of which Paul Wurth – – – – – 336 359

of which Business Area SMS Meer 1,415 861 1,039 1,365 1,152 1,104 1,050

of which elexis – – – 67 180 181 175

Sales 3,601 3,891 3,036 3,070 3,237 3,495 3,406

Order backlog 6,332 4,641 4,460 4,862 5,377 4,997 4,613

Employees2) 8,369 9,001 9,209 10,477 11,822 13,856 14,003


of which Paul Wurth – – – – 128 1,648 1,553

of which Business Area SMS Meer 2,008 2,572 2,599 3,205 3,431 3,647 3,716

of which elexis – – – 390 967 1,005 1,098

3)

2,83

5 3,30

9

5,14

2

5,28

8

2,34

1

2,93

1 3,42

3

3,23

5

3,16

7

SMS Siemag SMS Meer elexis Plastic TechnologyPaul Wurth

2,81

1

CONTENTS

Executive summary 4Structure of SMS group 10 Paul Wurth 16

Metallurgical Plants and Environmental Technology 22

Flat Rolling Plants 28

Tube and Pipe Plants 36

Long Products Plants 40

Processing Lines and Furnace Technology 46

Forging Plants 52

Electrical and Automation Systems 58

Production 64

Technical Service 68

Industrial Participations (Elexis, Elotherm) 72

Employees 80

Consolidated Financial Statementsas of Dec. 31, 2014 84Supervisory Board and Managing Board 87Addresses 88

SMS group

Business Units

4

Annual Report 2014SMS group

EXECUTIVE SUMMARY

The development of the global economy in 2014 lagged behind expectations. Supported by quantitative easing policies of the central banks, economic growth remained at 3.3%, the same level as the previous year.

In Europe, a moderate upswing continued in 2014, with growth of 0.8%. Compared to the rest of the eurozone, the German economy grew by an above-average 1.5%. This development was again driven by strong exports. While Spain and other countries with reform programs are recovering, stagnation persists above all in Italy and France.

The USA was a significant driver of the global economy (+2.4%). Due to the markedly im-proved framework conditions, a basis for further growth is in place.

China’s economy grew in 2014 at a rate of 7.4%, or less vigorously than in the previous year (7.8%). Considering the country’s more modest investment policy, this trend is expected to continue in the coming year. With growth of 0.1%, Japan’s economy failed to meet original expectations.

Increasingly, the emerging economies, with China at the forefront, are starting to align their growth with actual demand. Taken together, the threshold countries again contributed over-proportionally to the growth of the global economy, accounting for +4.4%.

The worsening Russia-Ukraine crisis had serious negative consequences for the economies of both countries. Other escalating problems for Russia are falling oil prices and EU sanctions.

GLOBAL ECONOMY

5

Global raw steel production in 2014 totaled some 1,662 billion t; that corresponds to a growth on 2013 of 1.2% (1,642 billion t). As the world’s largest steel producer, China increased its production only slightly compared to previous years (0.9%). South Korea achieved the largest growth in comparison with the major raw steel producing countries, at 7.5%. Similarly, in the USA (+1.7%), India (+2.3%), and Russia (+2.6%), production rose over-proportionally in 2014. Production in the Ukraine declined sharply (–17.1%). In Europe, it stagnated compared to 2013 (–0.1%). Unchanged in Europe is the severe price and cost pressure on steel producers.

The global overcapacities, the continuing gulf between raw materials and sales prices, and record steel production in China resulted in further low margins for steel producers. Average capacity utilization remains at a low degree of 77%.

Totaling 53 million t, global primary aluminum production grew compared to the previous year (+5%). Above all, the Gulf region (+23%) and China (+8%) were able to expand. Simulta-neously, other regions cut back production, in some cases drastically. In 2014, Western Europe remained largely stable. Considering the full capacity situation, prices in the coming year are likely to stay at a similar level.

STEEL AND ALUMINUM MARKET

Eckhard Schulte,

CFO

Burkhard Dahmen,

Spokesman of the Managing Board

6


Just like in the previous year, the market situation for metallurgical plant and machinery con-struction in 2014 was difficult and displayed a low willingness of steel producers to invest. Competition for the few major projects up for bidding was intense and caused noticeable price pressure on plant constructors. There had been hopes for a market recovery in 2014, but this failed to materialize. Furthermore, the crisis in Eastern Europe and the low oil price are impacting on the willingness to undertake major projects.

The structural overcapacities in the European steel industry (approx. 50 million t) continue to depress prices significantly.

Positive dynamics came mainly from North America. Due to the aging plant situation and im-proved financial conditions in the region, there is considerable investment potential. Postponed investment decisions are back on the table. Consolidation activities on the Chinese market are having an initial effect in the form of reduced growth in production. Looking ahead, we expect a decline in business with new plants and a growth in modernizations.

With the inauguration of the new government in India and the announcement of high investments in boosting the steel industry’s capacity, we hope planned projects will now be implemented.

The price war in the energy sector, driven by shale gas extraction in the USA, and the sig-nificant drop in oil prices will shore up the global economy and – together with low interest rates – trigger modest growth. This positive development is set to benefit the industrialized countries more than the emerging economies.

If the US domestic economy continues to pick up, experts anticipate that the Fed will end its low interest rate policy. However, a further increase in the value of the dollar could delay this step.

Despite positive exchange rate effects and lower oil prices, growth in Europe is likely to occur at a low level. Here, the ECB will be keeping a close eye on inflation, which it is trying to boost by purchasing state bonds. The current euro/dollar exchange rate favors European exporters.

Generally, the threshold countries tend to profit from stronger demand in the developed economies. Yet a return to the high growth rates of the past is not expected. Furthermore, a sustained low oil price represents a strain on the oil-exporting developing countries.

The main markets for equipment suppliers to the metallurgical and rolling mill industry will remain China, India, southeast Asia, the MENA region, and the USA. The structural problem of global overcapacities (some 400 million t) persists and is having a sustained dampening effect on investment in new plant. Global geopolitical risks further exacerbate this situation. Any improvement in customers’ margins due to falling raw materials prices will only affect their investment policy after a time lag.

We continue to see a large potential in the area of modernizations for the application of green plant technology as well as in the entire field of services. However, the market situation as a whole requires a certain degree of consolidation.

MARKET SITUATION IN PLANT CONSTRUCTION

PROSPECTS

FORECAST

7

That explains our strategic focus in the current year: implementation of our cost-cutting and efficiency-boosting program, and continuous expansion of our service business.

We expect order intake and sales to remain unchanged at the previous year’s level. Looking at pretax profit, we anticipate a moderate improvement compared to 2014 due to lower ex-penditure for restructuring.

No significant events occurred after the conclusion of the business year.

The market recovery we forecast has failed to take hold so far, therefore order intake by the SMS group in the past business year, at EUR 3,167 million, lagged behind the previous year’s value (2013: EUR 3,309 million).

In Business Area SMS Siemag, order intake declined by EUR 92 million to EUR 1,952 million (2013: EUR 2,044 million).

Business Area SMS Meer generated an order intake of EUR 1,050 million, which was 5% below the previous year’s figure (2013: EUR 1,104 million).

Finally, the elexis group contributed EUR 175 million (2013: EUR 181 million) to the order intake of the SMS group.

This is how order intake broke down according to global regions in 2013: Europe including Russia: 31% (2013: 29%) Asia: 24% (2013: 45%) America: 43% (2013: 25%) Africa: 2% (2013: 1%)

As expected, sales by the SMS group remained at the same level as in the previous year, amounting to EUR 3,406 million (2013: EUR 3,495 million).

Due to the low order intake, the order backlog of EUR 4,613 million also fell short of the previous year’s value (2013: EUR 4,997 million).

The number of employees (average over the year, including apprentices) in the SMS group increased by 147 to 14,003 (2013: 13,856).

REPORT ON SUBSEQUENT EVENTS

ORDER INTAKE

SALES

ORDER BACKLOG

EMPLOYMENT/EMPLOYEES

8


The number of employees in Business Area SMS Siemag decreased against the previous year by 17, reaching an average over 2014 of 9,133 (2013: 9,150). This included 1,553 staff members of Paul Wurth (2013: 1,648). Contributing to these figures was the increased recruitment of employees in our foreign service companies as part of a strategic expansion of our service business. In total, 4,315 employees were on our payroll in Germany and 4,818 abroad.

In Business Area SMS Meer, the average number of employees in 2014 totaled 3,716 (2013: 3,647). Here again, the hiring of new staff for the strategically important service area was mainly responsible. In total, 2,309 employees were on our payroll in Germany and 1,407 abroad.

In the elexis group, the number of employees in 2014 increased to 1,098 (2013: 1,005), pri-marily as a result of the initial consolidation of BST eltromat International Leopoldshöhe GmbH.

In the 2014 business year, the SMS group generated a pretax profit of EUR 31 million, or far short of the previous year’s figure (2013: EUR 178 million). The net operating margin amoun-ted to 0.9% (2013: 5.1%).

The equity ratio in 2014 remained similar, at 19.1% (2013: 19.3%).

To increase our competitiveness and earning power, we launched a cost-cutting and efficiency-boosting program in 2014. Previously, we systematically identified potentials across the entire value creation chain and in some cases already initiated changes. The implementation of the whole program will cover more than 600 steps. Included in the cost-reduction measures is a downscaling of our employee capacities in Germany. We will undertake the necessary adjustments in a way that is as socially acceptable as possible, while securing a maximum of expertise. The first positive impacts on our result are likely to emerge in 2015. The progress of the overall program is on schedule.

As a major component of our restructuring program, the two Business Areas SMS Siemag and SMS Meer as well as SMS GmbH merged as from January 1, 2015. This move creates uniform structures, processes, and market image. In the future, we will organize our business in the Business Areas Paul Wurth, Metallurgical Plants and Environmental Technology, Flat Rolling Plants, Tube & Pipe Plants, Long Products Plants, Processing Lines and Furnace Tech-nology, Forging Plants, Electrical & Automation Systems, Production, and Technical Service.

New in the Industrial Participations category of the SMS group alongside the elexis group is SMS Elotherm, previously part of Business Area SMS Meer. The portfolio of SMS Elotherm covers inductive and conductive high-frequency welding plants for longitudinal-seam-welded tubes as well as heating plants for seamless tubes in various steel alloys, stainless steels, and NF metals.

RESULT

COST-REDUCTION ACTIVITIES

REORGANIZATION

8 9

Annual Report 2014SMS group Annual Report 2014SMS group

The number of employees in Business Area SMS Siemag decreased against the previous year by 17, reaching an average over 2014 of 9,133 (2013: 9,150). This included 1,553 staff members of Paul Wurth (2013: 1,648). Contributing to these figures was the increased recruitment of employees in our foreign service companies as part of a strategic expansion of our service business. In total, 4,315 employees were on our payroll in Germany and 4,818 abroad.

In Business Area SMS Meer, the average number of employees in 2014 totaled 3,716 (2013: 3,647). Here again, the hiring of new staff for the strategically important service area was mainly responsible. In total, 2,309 employees were on our payroll in Germany and 1,407 abroad.

In the elexis group, the number of employees in 2014 increased to 1,098 (2013: 1,005), pri-marily as a result of the initial consolidation of BST eltromat International Leopoldshöhe GmbH.

In the 2014 business year, the SMS group generated a pretax profit of EUR 31 million, or far short of the previous year’s figure (2013: EUR 178 million). The net operating margin amoun-ted to 0.9% (2013: 5.1%).

The equity ratio in 2014 remained similar, at 19.1% (2013: 19.3%).

To increase our competitiveness and earning power, we launched a cost-cutting and efficiency-boosting program in 2014. Previously, we systematically identified potentials across the entire value creation chain and in some cases already initiated changes. The implementation of the whole program will cover more than 600 steps. Included in the cost-reduction measures is a downscaling of our employee capacities in Germany. We will undertake the necessary adjustments in a way that is as socially acceptable as possible, while securing a maximum of expertise. The first positive impacts on our result are likely to emerge in 2015. The progress of the overall program is on schedule.

As a major component of our restructuring program, the two Business Areas SMS Siemag and SMS Meer as well as SMS GmbH merged as from January 1, 2015. This move creates uniform structures, processes, and market image. In the future, we will organize our business in the Business Areas Paul Wurth, Metallurgical Plants and Environmental Technology, Flat Rolling Plants, Tube & Pipe Plants, Long Products Plants, Processing Lines and Furnace Tech-nology, Forging Plants, Electrical & Automation Systems, Production, and Technical Service.

New in the Industrial Participations category of the SMS group alongside the elexis group is SMS Elotherm, previously part of Business Area SMS Meer. The portfolio of SMS Elotherm covers inductive and conductive high-frequency welding plants for longitudinal-seam-welded tubes as well as heating plants for seamless tubes in various steel alloys, stainless steels, and NF metals.

RESULT

COST-REDUCTION ACTIVITIES

REORGANIZATION

Compared to the previous year, liquid assets fell by EUR 226 million to EUR 932 million (2013: EUR 1,158 million). The outflow of funds from business activities amounted to EUR 187 million. This is mainly attributable to a reduction in customer payments due to the order situation as well as to higher tax payments. The outflow of funds from investment activity, at EUR 119 mil-lion, is below that for the previous year (EUR 154 million), but remains at a high level. That is partly offset by an inflow of funds from financing activities of EUR 49 million, resulting from the sale of securities from current assets. Furthermore, there is a positive effect which arises from the conversion of foreign currencies into euros (+ EUR 38 million).

In addition to liquid assets of EUR 932 million, we also hold securities from current assets to a market value of EUR 701 million. After deduction of financial obligations of EUR –141 million, this results in net liquidity of EUR 1,492 million (2013: EUR 1,760 million).

Expenditure for purchasing property, plant, and equipment as well as intangible assets in business year 2014 totaled EUR 77 million (2013: EUR 124 million). Investments mainly went into expanding and modernizing our workshops in Germany, China, and India, as well as into extending our international service workshops. We also invested in upgrading our IT systems.

Our plans for 2015 involve a much lower investment volume for intangible assets as well as property, plant, and equipment. Investment projects are dominated by IT and replacements of machines.

Financial investments in business year 2014 amounted to EUR 77 million (2013: EUR 52 million). A major instance of this was the acquisition of BST eltromat International Leopoldshöhe GmbH.

LIQUIDITY

INVESTMENTS

Burkhard Dahmen Eckhard Schulte

The SMS group, under the roof of SMS Holding GmbH, is a group of global players in machin-ery and plant construction for steel and non-ferrous metals processing. SMS Holding GmbH is responsible for strategic planning and control. The sole owner of the SMS group is Siemag Weiss GmbH & Co. KG, the holding company of the Weiss entrepreneurial family.

STRUCTURE OF THE SMS GROUP

1312


IRONMAKING AND DIRECT REDUCTION PLANTS

METALLURGICAL PLANTS AND ENVIRONMENTAL TECHNOLOGY

FLAT ROLLING PLANTS

TUBE AND PIPE PLANTS

LONG PRODUCTS PLANTS

PROCESSING LINES AND FURNACE TECHNOLOGY

FORGING PLANTS

ELECTRICAL AND AUTO-MATION SYSTEMS

PRODUC-TION

TECHNICAL SERVICE

INDUSTRIAL PARTICIPATION

DIRECT REDUCTION

TECHNOLOGY

Midrex® direct reduction plants

Rotary hearth furnaces

CONTINUOUS CASTERS

Continuous casting techno-logy for slabs

Continuous casting techno-logy for blooms, billets and beam blanks

CSP® techno-logy/USP® technology

BCT® plants

ENVIRONMENTAL

TECHNOLOGY

Dedusting plants Filter and environ ment protection plants

Energy recovery technology

HOT ROLLING MILLS

Steckel rolling mills

Heavy plate mills


Filter and environ ment protection plants

Water supply systems

Logistics systems

COLD ROLLING

MILLS

Tandem cold rolling mills

Reversing rolling mills

Skin-pass mills Multi-roll mills Filter and environment protection plants

Logistics systems

ALUMINUM PLANTS

Hot strip rolling mills


Individual stands Thin strip stands Shear and slit-ting equipment

Filter and environment protection plants

Logistics systems


Seamless tube plants

– PQF® plants– CPE plants– Plug mills– Hot pilger mills– Assel mills

Welded tubeplants

– ERW plants– Large-diameter

pipe plants– Spiral pipe

welding plants Finishing lines Cold pilger mills Technologies

– CARTA® Tech-nology System

– LASUS® hottube wallthicknessmeasurement Heat treatmentlines

SECTION AND BILLET

MILLS

Heavy section mills

Medium section mills Blooming mills

Billet mills Large bar mills Rail mills

BAR AND WIRE ROD

MILLS

Combined bar and wire rod mills

Rebar mills Wire rod mills Merchant bar mills

SBQ bar mills VCC® lines Coil handling systems

BRIGHT STEEL LINES

Drawing machines

Peeling machines

Straightening machines

Grinding and polishing machines

STRIP PROCESSING

LINES

Pickling linesHot-dip galva-nizing linesAnnealing linesAnodizing linesCoating linesAnnealing and pickling lines for stainless steelShear and slit-ting equipmentRegeneration, filter, and envi-ronment protec-tion plants

FURNACE TECHNOLOGY

Furnaces for heat treatment of flat steel and NF metalsCooling systems for heat treat-ment of flat steel and NF metalsFurnaces for heat treatment CSP®

technology/USP® technologyHeating furnaces

FORGING PLANTS AND

PRESSES

Open-die forging presses Closed-die forging presses Powder pressesRadial forging machines Wheel rolling machines Forging rollsRing rolling machines Forging manipulatorsExtrusion presses Special presses

GENERAL SOLUTIONS

Production planning systems (PPS)Energy advisorPlant condition advisorNew plant op-era tion conceptHolistic solution for the operating areasWeb basedreportingWireless LAN operationUpgrade packageVirtualization

Complete Solutions for

Blast furnacesSteel plants and submerged arc furnaceContinuous casting plantsHot rolling millsCold rolling millsAluminum hot and cold rolling millsStrip processing lines

WORLDWIDE PRODUCTION

FACILITIES

Germany– Hilchenbach– Mönchen-

gladbachChina

– Zhangjiagang– Shanghai India

– Bhubaneswar

ELEXIS

Strip and web-guiding systemsQuality assu-rance systemsDrive technologyAutomated handling sys-tems plastic

ELOTHERM

Hardening machinesInductive hea-ting plantsLaser exposure systemsInductive tube weldingInductive seam annealingQuench and temper lines

SPARE PARTSAND

LOGISTICS

OEM spare partsSpare parts management eServiceWarehousing

CONSULTINGAND

TRAINING

TECademyFact findingMaintenance audits

MAINTENANCE AND

REPAIRS

Trouble shootingMaintenance service Condition monitoring Equipment checks

UPGRADES AND MODER

NIZATION

Value addedcomponents Mechanical, hydraulic and electrical systems Automation equipment

ALUMINUM PLANTS

Smelting and casting furnacesCasters

– Vertical– Horizontal

Continuous homogenization plantsChamber homogenization plantsIngot scalpersBand sawsBrazing machinesPlate stretchers

COPPER PLANTS

Anode casting wheels CONTIROD®

plants directube®

plants VERTICAST®

plantsStraighteners Drawing plantsInner grooving lines

METAL LURGICAL AND

STEEL MAKING TECHNOLOGY

Reduction furnaces

Converters Electric steel-works

CONARC® furnaces

Ladle furnaces Pretreatment Secondary metallurgy

Tertiary metallurgy

COKE OVEN AND SINTERING PLANTS

Coke oven plants Coke oven batteries

Coke oven auxiliary plants

Coke oven automation and control

Coke handling machines

Sintering plants Sinter cooling Sinter off-gas cleaning (EFATM)

Environmental protection tech-nologies for the metals industry

Steelmaking by-product recycling plants

BLAST FURNACE PLANTS

Blast furnace construction and modernization

Stockhouse and charging systems

Blast furnace top charging systems

Blast furnace proper design

Blast furnace lin ing and cooling

Hot blast stoves and energy recovery

Blast furnace gas cleaning systems

Furnace automa-tion and control systems

Coal grinding, drying, and pulverized coal injection plants

Tapping and measuring technology

Slag granulation Pig casting machines

1312


IRONMAKING AND DIRECT REDUCTION PLANTS


FLAT PRODUCT PLANTS




FORGING PLANTS

ELECTRICAL AND AUTO-MATION SYSTEMS

PRODUC-TION

TECHNICAL SERVICE

INDUSTRIAL PARTICIPATION

DIRECT REDUCTION

TECHNOLOGY

Midrex® direct reduction plants

Rotary hearth furnaces

CONTINUOUS CASTERS

Continuous casting techno-logy for slabs

Continuous casting techno-logy for blooms, billets and beam blanks


BCT® plants

ENVIRONMENTAL

TECHNOLOGY

Dedusting plants Filter and environ ment protection plants

Energy recovery technology

HOT ROLLING MILLS

Steckel rolling mills

Heavy plate mills


Filter and environ ment protection plants

Water supply systems

Logistics systems

COLD ROLLING

MILLS


Reversing rolling mills

Skin-pass mills Multi-roll mills Filter and environment protection plants

Logistics systems

ALUMINUM PLANTS

Hot strip rolling mills


Individual stands Thin strip stands Shear and slit-ting equipment

Filter and environment protection plants

Logistics systems


Seamless tube plants

– PQF® plants– CPE plants– Plug mills– Hot pilger mills– Assel mills Welded tube plants

– ERW plants– Large-diameter

pipe plants– Spiral pipe

welding plants Finishing lines Cold pilger mills Technologies

– CARTA® Tech-nology System

– LASUS® hot tube wall thickness measurement

Heat treatment lines

SECTION AND BILLET

MILLS

Heavy section mills

Medium section mills Blooming mills

Billet mills Large bar mills Rail mills

BAR AND WIRE ROD

MILLS

Combined bar and wire rod mills

Rebar mills Wire rod mills Merchant bar mills

SBQ bar mills VCC® lines Coil handling systems

BRIGHT STEEL LINES

Drawing machines

Peeling machines

Straightening machines

Grinding and polishing machines

STRIP PROCESSING

LINES

Pickling lines Hot-dip galva-nizing lines

Annealing lines Anodizing lines Coating lines Annealing and pickling lines for stainless steel

Shear and slit-ting equipment

Regeneration, filter, and envi-ronment protec-tion plants

FURNACE TECHNOLOGY

Furnaces for heat treatment of flat steel and NF metals

Cooling systems for heat treat-ment of flat steel and NF metals

Furnaces for heat treatment CSP® technology/USP® technology

Heating furnaces

FORGING PLANTS AND

PRESSES

Open-die forging presses

Closed-die forging presses

Powder presses Radial forging machines

Wheel rolling machines

Forging rolls Ring rolling machines

Forging manipulators

Extrusion presses

Special presses

GENERAL SOLUTIONS

Production planning systems (PPS)

Energy advisor Plant condition advisor

New plant op-era tion concept

Holistic solution for the operating areas

Web based reporting

Wireless LAN operation

Upgrade package

Virtualization

Complete Solutions for Blast furnaces Steel plants and submerged arc furnace

Continuous casting plants

Hot rolling mills Cold rolling mills Aluminum hot and cold rolling mills

Strip processing lines

WORLDWIDE PRODUCTION

FACILITIES

Germany– Hilchenbach– Mönchen-

gladbach China

– Zhangjiagang– Shanghai India

– Bhubaneswar

ELEXIS

Strip and web-guiding systems

Quality assu-rance systems

Drive technology Automated handling sys-tems plastic

ELOTHERM

Hardening machines

Inductive hea-ting plants

Laser exposure systems

Inductive tube welding

Inductive seam annealing

Quench and temper lines

SPARE PARTS AND

LOGISTICS

OEM spare parts Spare parts management

eService Warehousing

CONSULTING AND

TRAINING

TECademy Fact finding Maintenance audits

MAINTENANCE AND

REPAIRS

Trouble shooting Maintenance service

Condition monitoring

Equipment checks

UPGRADES AND MODER

NIZATION

Value added components

Mechanical, hydraulic and electrical systems

Automation equipment

ALUMINUM PLANTS

Smelting and casting furnaces

Casters– Vertical– Horizontal Continuous homogenization plants

Chamber homogenization plants

Ingot scalpers Band saws Brazing machines

Plate stretchers

COPPER PLANTS

Anode casting wheels

CONTIROD® plants

directube® plants

VERTICAST® plants

Straighteners Drawing plants Inner grooving lines

METAL LURGICAL AND

STEEL MAKING TECHNOLOGY

Reduction furnaces

Converters Electric steel-works

CONARC® furnaces

Ladle furnaces Pretreatment Secondary metallurgy

Tertiary metallurgy

COKE OVEN AND SINTERING PLANTS

Coke oven plants Coke oven batteries

Coke oven auxiliary plants

Coke oven automation and control

Coke handling machines

Sintering plants Sinter cooling Sinter off-gas cleaning (EFATM)

Environmental protection tech-nologies for the metals industry

Steelmaking by-product recycling plants

BLAST FURNACE PLANTS

Blast furnace construction and modernization

Stockhouse and charging systems

Blast furnace top charging systems

Blast furnace proper design

Blast furnace lin ing and cooling

Hot blast stoves and energy recovery

Blast furnace gas cleaning systems

Furnace automa-tion and control systems

Coal grinding, drying, and pulverized coal injection plants

Tapping and measuring technology

Slag granulation Pig casting machines

16 17

Annual Report 2014Paul Wurth

Although the global steel industry was able to achieve slight growth in raw steel production in 2014, the profit situation of companies was unsatisfactory. Furthermore, overcapacities in many regions around the world, in particular China and Europe, caused steel producers to rein in their investment activities for new plant construction. What this situation meant for plant suppliers such as the Paul Wurth group is even tougher competition on a smaller market.

As a result of efforts in project acquisition and a broad product portfolio tailored to demand, the Paul Wurth group was able to increase order intake slight-ly in 2014, especially with smaller orders. Conse-quently, the sales volume for business year 2014 remained at a similar level to 2013.

COKING PLANT TECHNOLOGY AND SINTER PLANTS

As part of its drive to increase the real net output ratio of its coke oven plant business, Paul Wurth took over the coking plant division of Schalker Eisen-hütte Maschinenfabrik, adding coke oven machines to its range. Also important in this area was the commissioning of Bhushan Steel’s new coke oven plant complete with a gas treatment system in Me-ramandali, India. Not least due to the efforts of the joint venture Paul Wurth IHI Co. Ltd in Japan, the Paul Wurth group attracted an order for the design and supply of all the mechanical components for the second new coke oven battery at NSSMC in Kashima, Japan.

The successful expansion of the product range to include the treatment of input materials was con-firmed in 2014 with an order Paul Wurth secured for construction of a new sinter plant for Bhushan Power & Steel in India.

As prospects in the global steel industry remain extremely uncertain, it is safe to assume that there will not be any turnaround in the near future.

Taking these challenges on board, Paul Wurth will build on its solid market reputation and constantly improved product range by increasing efficiency and reducing costs within the framework of its “3P – Paul Wurth Performance Program” launched in 2013.

BLAST FURNACES

It is clear from both new orders and commissioning projects for blast furnaces in 2014 that currently, and probably in the near future, no new production plants will be built, except in India and southeast Asia. Most projects on the market consist of repairs and revamps. This is because customers are concentrating on eve-rything from small improvements up to complete re-vamps to extend the furnace campaign of their plants or to comply with the latest production standards. The Paul Wurth group attracted two major orders of this type in 2014 from the ArcelorMittal group. The first was a contract for the engineering and supply of core components and construction site services for the revamp of the third blast furnace in series in Temirtau, Kazakhstan. Paul Wurth also secured a similar job for the revamp of blast furnace No.°2 of ArcelorMittal Algeria in Annaba, Algeria.

Once again in business year 2014, Paul Wurth com-missioned several coal grinding, drying, and injection plants, for instance at Evraz ZSMK and NLMK in Rus-sia, at DMKD in the Ukraine, and at DK Recycling und Roheisen in Germany.

Purchase of the coke oven machine segment of Schalker Eisenhütte Maschinenfabrik increases value creation depth

“3P – Paul Wurth Performance Program” for more efficiency and lower costs

Expansion of customized repair and service models

Progress made with new processes such as dry solidification of blast furnace slag with energy recovery

COKE OVEN PLANTS, SINTER PLANTS, BLAST FURNACES

Dr.-Ing. Guido Kleinschmidt,

Member of the Managing

Board SMS group

Managing Board Paul WurthGeorges Rassel, CEO

Frank Wagener, CFO

Dr.-Ing. Thomas Hansmann, CTO

17

Although the global steel industry was able to achieve slight growth in raw steel production in 2014, the profit situation of companies was unsatisfactory. Furthermore, overcapacities in many regions around the world, in particular China and Europe, caused steel producers to rein in their investment activities for new plant construction. What this situation meant for plant suppliers such as the Paul Wurth group is even tougher competition on a smaller market.

As a result of efforts in project acquisition and a broad product portfolio tailored to demand, the Paul Wurth group was able to increase order intake slight-ly in 2014, especially with smaller orders. Conse-quently, the sales volume for business year 2014 remained at a similar level to 2013.

COKING PLANT TECHNOLOGY AND SINTER PLANTS

As part of its drive to increase the real net output ratio of its coke oven plant business, Paul Wurth took over the coking plant division of Schalker Eisen-hütte Maschinenfabrik, adding coke oven machines to its range. Also important in this area was the commissioning of Bhushan Steel’s new coke oven plant complete with a gas treatment system in Me-ramandali, India. Not least due to the efforts of the joint venture Paul Wurth IHI Co. Ltd in Japan, the Paul Wurth group attracted an order for the design and supply of all the mechanical components for the second new coke oven battery at NSSMC in Kashima, Japan.

The successful expansion of the product range to include the treatment of input materials was con-firmed in 2014 with an order Paul Wurth secured for construction of a new sinter plant for Bhushan Power & Steel in India.

As prospects in the global steel industry remain extremely uncertain, it is safe to assume that there will not be any turnaround in the near future.

Taking these challenges on board, Paul Wurth will build on its solid market reputation and constantly improved product range by increasing efficiency and reducing costs within the framework of its “3P – Paul Wurth Performance Program” launched in 2013.

BLAST FURNACES

It is clear from both new orders and commissioning projects for blast furnaces in 2014 that currently, and probably in the near future, no new production plants will be built, except in India and southeast Asia. Most projects on the market consist of repairs and revamps. This is because customers are concentrating on eve-rything from small improvements up to complete re-vamps to extend the furnace campaign of their plants or to comply with the latest production standards. The Paul Wurth group attracted two major orders of this type in 2014 from the ArcelorMittal group. The first was a contract for the engineering and supply of core components and construction site services for the revamp of the third blast furnace in series in Temirtau, Kazakhstan. Paul Wurth also secured a similar job for the revamp of blast furnace No.°2 of ArcelorMittal Algeria in Annaba, Algeria.

Once again in business year 2014, Paul Wurth com-missioned several coal grinding, drying, and injection plants, for instance at Evraz ZSMK and NLMK in Rus-sia, at DMKD in the Ukraine, and at DK Recycling und Roheisen in Germany.



Board SMS group

Managing Board Paul WurthGeorges Rassel, CEO

Frank Wagener, CFO

Dr.-Ing. Thomas Hansmann, CTO

18


Adding to these tailor-made repair and revamp models, Paul Wurth continued to expand its range of services systematically in 2014. The company is, above all, determined to adapt to local requirements and to support customers as a life-cycle partner. That is why, for instance in November 2014, the Paul Wurth group opened a new service workshop in Bhu-baneswar, India. This significantly strengthened the company’s service business in India, so that it offers customers there an extended range including repairs, spare parts, and services at competitive conditions.

DIRECT REDUCTION

In March 2014, Paul Wurth took another step toward becoming a complete process supplier for iron and steel production by signing a license agreement with Kobe Steel in Japan. Now Paul Wurth can supply Midrex® gas-based direct reduction plants.

INNOVATION

It is essential for a technology company like Paul Wurth to promote and apply its long-standing corpo-rate culture of innovation and the individual creativity of its employees. That is why 2014 saw the develop-

Life-cycle partner for all

customers worldwide

ment of new technologies such as the dry granulation of blast furnace slag for energy recovery, Ciroval™ (carbon iron valorization) treatment of blast furnace sludge, or the minimization of NOx emissions from coke ovens. Moreover, Paul Wurth launched an inno-vation program in 2014. It is an ideas management system designed to create a systematic approach to innovation processes that will stimulate creativity for new developments in the group.

OTHER DIVISIONS

A specialist in planning public and private construc-tion projects, the subsidiary Paul Wurth Geprolux was able to expand its position above all in the health-care industry (with a planning order for a new convalescent clinic) as well as in transport inf-rastructure (with technical engineering for a new ICE repair shop for the Deutsche Bahn railroad company).

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MAJOR ORDERS COMMISSIONING PROJECTS

TECHNOLOGIES FOR PIG IRON PRODUCTION− ArcelorMittal Temirtau, Kazakhstan;

engineering, supply of core components and construction site services for the modernization of blast furnace No. 4

− ArcelorMittal Algeria, Algeria; engineering, supply of core components and construction site services for the modernization of blast furnace No. 2

− Rogesa, Germany; engineering and supply of core components for an axial cyclone for blast furnace No. 4

− Bhushan Power & Steel, India; engineering, supply of core components, assembly and commissioning monitoring of construction of a sinter plant

− ArcelorMittal Ostrava, Czech Republic; turnkey sinter belt dedusting

− NSSMC, Japan; engineering and supply of all mechanical components for construction of coke oven battery 1F

− Bhushan Power & Steel, India; engineering and supply of core components for a coke drying-cooling plant

− CSN, Brazil; engineering, supply, and commissioning monitoring of coke oven machines

− JFE, Japan; engineering, supply, and commissioning monitoring of coke oven machines

URBAN CONSTRUCTION, BUILDING CONSTRUCTION, AND INFRASTRUCTURE PROJECTS (PAUL WURTH GEPROLUX)− CHNP Centre Hospitalier Neuro-Psychiatrique, Luxembourg;

project management for the construction of a new convale-scent clinic

− Deutsche Bahn Fernverkehr, Germany; technical engineering for a new ICE repair shop

− Municipality of Roeser, Luxembourg; construction of a modular building for an elementary school

− Immo Horizon – Cactus, Luxembourg; project management for the construction of a shopping mall

TECHNOLOGIES FOR PIG IRON PRODUCTION− Vallourec Sumitomo do Brasil, Brazil;

new mini blast furnace No. 2 in the Jeceaba plant− JSC Evraz ZSMK Zapsib, Russia;

coal grinding, drying, and injection plant for blast furnaces Nos. 1, 2, and 3

− Novolipetsk Iron and Steel, Russia; coal grinding, drying, and injection plant for blast furnaces Nos. 3 and 5

− ISD Group DMKD, Ukraine; coal grinding, drying, and injection plant for blast furnaces Nos. 1M, 8, 9, and 12

− DK Recycling und Roheisen, Germany; coal grinding, drying, and injection plant

− ThyssenKrupp Steel Europe, Germany; bell-less top-charging system and slag granulation plant for blast furnace No. 2 at Duisburg-Schwelgern location

− Bhushan Steel, India; new coke oven battery No. 1 and gas treatment plant at Meramandali location

CTI SYSTEMS S. A. − AGCO, Laverda, Italy;

new coating plant for agricultural machinery− Airbus, Germany/France/UK;

loading equipment for Beluga transport aircraft

URBAN CONSTRUCTION, BUILDING CONSTRUCTION, AND INFRASTRUCTURE PROJECTS (PAUL WURTH GEPROLUX)− Creos, Luxembourg;

commissioning of new regional center in Roost (project management)

− DB International, Germany; new maintenance hall in Deutzfeld (technical engineering)

− Verwaltung für öffentliche Bauten administration authority, Luxembourg; commissioning of CJ8 building of the European Court in Luxembourg (project management)

− Luxembourg Ministry of the Economy; opening of the industrial hall and the administrative building “Ecostart 3” in Foetz (project management and integrated design)

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LOW-EMISSION COKE OVEN PLANT

There were smiles all round on June 26, 2014, when Bhushan Steel produced the first coke in its new coke oven plant at the Meramandali location in Orissa, India. Paul Wurth had designed the layout and supplied the core components for the new plant, including the gas treatment system.

Featuring 74 furnaces, a furnace height of 7.6 meters, and a nominal volume of 78.92 m³, the rubble-based coke oven battery has an annual production capacity of 1.3 million t. This large battery represents the latest coking technology, above all because of its minimized daily furnace cycles and reduced emissions. There is even more scope to cut emissions with the Paul Wurth Sopreco® system for individual chamber pressure control.

New coke oven battery including gas treatment system at Bhushan Steel, India.

Location: Bhushan Meramandali, India

BHUSHAN STEEL

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Annual Report 2014Metallurgy

Energy efficiency and resource saving are top priorities for many of our customers’ projects

Strong demand for submerged-arc furnaces for silicon metal, ferrosilicon, and ferronickel

Connectivity of production processes as part of “Industry 4.0” – a new way of improving process control in steelmaking plants


23

Order intake by the division in 2014 was below the previous year’s level because we were not able to book two major orders. Sales were slightly up on 2013. Due to the excess global production of steel leading to a low price level, our customers are not releasing funds for new plants.

Instead, customers worldwide have invested in re-vamps. This is where we are the experts, above all in converter steelworks and continuous casters for slabs. What customers want more than anything else are tailored solutions.

Demand for environmental technology, energy efficiency, and resource saving is influencing the design of many components.

As in the previous year, the market for steel long products manufacturing equipment remained at the same low level in 2014. Even business with revamps declined slightly.

Nevertheless, Mississippi Silicon LLC., USA, contract-ed SMS Siemag to supply two electric submerged-arc furnaces. Their combined annual capacity totals 33,000 t. Not only responsible for the furnaces, SMS is also supplying a primary gas cleaning system that meets all the requirements of green technology.

Another modernization project is in the pipeline at SSAB Lulea, Sweden, where SMS will revamp the converter steelworks and extensively upgrade the environmental units. These two measures will ensure eco-friendly processes and efficient energy recovery at the plant.

There was reason for celebration in September 2014 in Mississippi County, Arkansas, USA when the first spade was turned for a greenfield project there. The new works will specialize in sophisticated products such as pipe grades for pipelines, silicon steels for electrical applications, and AHSS (advanced high-

strength steels). In the first phase, SMS will supply a 150-t electric-arc furnace, a 150-t ladle furnace with two treatment stands, a 150-t RH-TOP plant, a gas cleaning system, and a single-strand CSP® plant. All this is designed for an annual capacity of 1.5 million t, subsequently to be extended in a second phase to 3.0 million t per year with a second casting strand. Production of the first steels is scheduled for early 2016.

Our Metallurgical Plants and Environmental Tech-nology Division attracted an order from Siderúrgica Nacional (SN) in Venezuela for a ladle degassing plant that will be installed in the second construc-tion stage of its new complex for steel production and processing. The new 200-t-VD-X-eed® (vacuum degassing) plant from SMS Mevac will complete the electric steelworks, enabling our customer to produce high-quality tube and pipe steels as well as low-carbon ULC qualities.

At steel producer Ternium Siderar in Argentina, a high-performance slab continuous caster supplied by SMS Siemag went on stream. Now Siderar can fully utilize the capacity of the upstream steelworks and increase its output of low to medium-carbon steels and peritectic grades.

New on the books is an order from Štore Steel, Slove-nia, for a two-strand billet caster from SMS Concast. Once installed, the machine will enable the company to cast high-quality steel and spring steel grades, increasing the overall quality of its products.

A three (four) strand UHQ (ultra-high quality) vertical continuous caster for special steel blooms went into production at Timken in Canton, Ohio, USA. The first bloom was cast in October 2014. Particularly note-worthy is that the plant is the largest of its type for rectangular formats, and it features special equip-ment such as Dynamic Mechanical Soft Reduction for the production of top-quality blooms.



Board SMS group

Heads of DivisionChristian Geerkens

Dr.-Ing. Thomas Germershausen

Michael Rzepczyk

24


MODERNIZATION PROJECTS INCREASINGLY IMPORTANT

It is already clear that 2015 will bring few new invest-ment projects and another decline in order volume. However, we expect a number of modernizations to be implemented, including large-scale jobs. Further-more, a few major projects are likely.

The SMS group will continue to focus on revamps of converter steelworks and continuous casters. We anticipate a stable project volume in the area of electric steelworks. Especially new developments such as SHARC (shaft arc furnace), the PEM (primary energy melter) family, and our groundbreaking BCT® (belt casting technology) should create opportunities. We will also continue to count on green technology. That makes sense in the light of increasing demand for energy-optimized complete plants.

Today’s trend in continuous casting technology is toward production of ever higher qualities, while niche markets are opening up in regions like Africa and Russia that we can exploit, for instance with our belt casting technology.

This process ensures cost-effective production of flat products, even with small capacities of less than 500,000 t/year. The market potential for contin uous casters for long products is dominated by moderni-zation projects and high-efficiency minimills in the Middle East.

FUTURE MARKET POTEN-TIALS AND STRATEGIES OF INDIVIDUAL BUSINESS FIELDS

There is growing interest among steel manufacturers in completing their own process and value creation chains. To meet this demand, our division offers an increasingly diverse portfolio that responds to specific market requirements.

Worldwide, our customers are looking at efficient green technology, an area where SMS has developed a wealth of know-how and expertise. All our products are designed to significantly reduce raw materials input, energy use, and fuel consumption, as well as

Strong interest in

various types of

scrap pre-heating

to improve recycling rates. This is how we respond to the globally ever-stricter legislation that applies to all steelworks and continuous casters.

Looking at the SAF (submerged-arc furnace) area, the demand for furnaces for silicon metal, ferrosilicon, and ferronickel continues to be strong. The regional centers here are in the Middle East as well as North Africa, southeast Asia, and North America. Acutely aware of current developments, the SMS group will in the future increasingly offer energy recovery tech-nologies for SAF.

We have identified two trends in converter steel-works: investment in new vessels as well as in im-proving energy recovery from converter gases. There is also a growing market for special applications (NF metals, copper). The complex linking of production processes for the “Industry 4.0” revolution requires, among other things, optimization of process control. That will ensure all available data can be used to improve the blasting process.

More and more manufacturers want to make special steels using the electric steelmaking process, as well as nonferrous metals for ferroalloys. Regional centers here are India, central Asia, and the Middle East. Our customers are increasingly interested in energy-saving applications and the various types of scrap preheating.

This is where the SMS group offers new products and developments. When it comes to electricarc furnaces, the most important aspects for our customers are work safety, process stability, and costefficiency.

SMS supplies innovative solutions such as the automatic slag door, modern robot technology for sampling, and extensive electrical and automation systems.

Now, SMS Mevac has expanded its range of services to cover consulting based on its excellent know-how about metallurgical processes in secondary and tertiary metallurgy. Customers benefit because they can systematically plan modernization and new construction projects.

25

Strong demand is unbroken for the production of high-quality steels in continuous casters for flat products. This is a field where the SMS group constantly devel-ops improved plant components. We have expanded our range for the thick slab market. One example of this is the world’s largest continuous caster currently under construction at Dillinger Hütte, Germany. The division is branching out even further with our belt casting technology (BCT). This innova tion makes it possible to cast both normal steel grades as well as grades whose bending properties make them unsuit-able for conventional continuous casters.

SMS Concast offers innovative solutions to increase product quality in continuous casters for long prod-ucts. Included here are optimized mold level measure-ment (also for closed casting), extra-efficient stirrers (more homogeneous solidification microstructure at 30% lower electricity consumption), or comprehen-sive and intuitively visualized billet storage manage-ment (CONYARD-OUT).

NEW PROSPECTS FOR STEELWORKS INCLUDING SECOND ARY AND TERTIARY METALLURGY COMPETENCE FOR NF METALS

Currently, an important new market is emerging in this field, along with the opportunity for the SMS group to earn another leading position in this area. Central to this strategy is the use of our compo-nents for pyrometallurgical and hydrometallurgical metal production processes. Here, SMS is working with a US customer on implementing an innovative, low-cost, eco-friendly process route for producing so-called polysilicon, used as a raw material for solar panels.

26


MAJOR ORDERS

SUBMERGED-ARC FURNACES− CBMM, Brazil; 15-MVA submerged-arc furnace for

dephosphorized slags containing niobium− Mississippi Silicon, USA; two submerged-arc furnaces

for manufacturing silicon; complete gas cleaning for both furnaces

CONVERTER STEELWORKS− Jindal South West, India; one 130-t converter with

trunnion ring and one 170-t converter with trunnion ring− US Steel Košice, Slovakia; a torpedo ladle car− Salzgitter Flachstahl GmbH, Germany;

modernization of C converter− Rourkela Steel Plant, RSP (SAIL), India; modernization

of the converter primary dedusting system− SSAB Lulea, Sweden; modernization of converter

steelworks and supply of environmental technology− Tata Steel IJmuiden BV, Netherlands; modernization of

two converters, Nos. 21 and 22− Tulachermet, Russia;

supply of a 160-t converter steelworks

ELECTRIC STEELWORKS− Big River Steel, USA;

supply of a 150-t electric steelworks− Siderúrgica Nacional SN (formerly EPSSN), Venezuela;

various replacement parts

SECONDARY METALLURGY− Siderúrgica Nacional SN (formerly EPSSN), Venezuela;

200-t VD plant− Big River Steel, USA;

150-t RH-TOP plant and two LTS stations− New Zealand Steel, New Zealand; 75-t ladle furnace

CONTINUOUS CASTING OF LONG PRODUCTS− New Zealand Steel, New Zealand;

four-strand ingot plant− Vizag Steel Plant, India;

five-strand plant for round and rectangular blooms− Sirjan Jahan Steel Company, Iran;

six-strand ingot plant− Štore Steel, Slovenia; two-strand ingot plant− SLR Metaliks, India; two-strand ingot plant− Sterling Steel, USA;

modernization of eight-strand ingot plant− ÖZKAN Demir Celik Sanayi A. S., Turkey;

conversion to five-strand ingot plant

CONTINUOUS CASTING FLAT PRODUCTS− AcelorMittal Aviles, Spain;

modernization and alteration of a two-strand slab plant

− Salzgitter Flachstahl GmbH, Germany; modernization and alteration of slab continuous caster No. 2

− US Steel Gray Works, USA; modernization and alteration of a slab continuous caster

– Tata Steel, India; flame descaling line

CSP®

− Big River Steel, USA; CSP® caster− Jindal South West, India;

modernization and alteration of CSP® plant No. 1− Zaporizhstal, Ukraine;

engineering for a CSP® continuous caster with two strands

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GERMAN FUTURE AWARD FOR JOINT PROJECT “HORIZONTAL THIN STRIP CASTING OF STEEL”

In November 2014, the German Federal President Joachim Gauck presented the “German Future Award – Federal President’s Award for Technology and Innovation” in Berlin. Among the top programs was the joint project “Horizontal Thin Strip Casting of Steel – Resource-effi cient Manufacturing of New High-performance Ma terials.” The partners in the project are Salzgitter Flachstahl GmbH, SMS Siemag AG, and the Technical University of Clausthal.

During their cooperation, the experts developed a new steel casting process that requires much less energy than conventional methods. Furthermore, it offers the prospect of producing a whole new generation of steel materials – including HSD® grades – which can in turn reduce energy consumption. This happens when they are used in lightweight construction, e.g., in the auto-motive industry.

During its implementation of the project “Horizontal Thin Strip Casting of Steel,” the Salzgitter group invested at its Peine location in a pilot plant that is currently in the run-up phase.

From left to right: Prof. Dr. Karl-Heinz Spitzer, TU Clausthal, Federal President Joachim Gauck, Ulrich Grethe, CEO of Salzgitter Flachstahl GmbH, Burkhard Dahmen, Spokesman of the Managing Board SMS Holding GmbH.

[1] | Belt Casting plant at Salzgitter Flachstahl in Peine. [2] | Filling the tundish.

Location: Peine, Germany

BCT® – BELT CASTING TECHNOLOGY

[1] [2]

28

Annual Report 2014Flat Rolling Plants

Growing demand for plants that produce special qualities and niche products

Development of machines and plants for smaller rolling capacities that can be increased later

Lightweight automotive construction leads to more investment in aluminum rolling equipment

Sophisticated revamp solutions for better product quality gain in importance

FLAT ROLLING PLANTS

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Overcapacities and low profit levels in the steel industry made our customers reluctant to invest. Individual projects, for instance for conventional hot rolling mills, are under fierce price pressure.

Although favorable conversion costs have increased demand for thin slab technology, this is countered by postponement of orders because of financing difficulties.

There is also a continued demand for advanced modernization solutions involving high project plan-ning and engineering effort, as well as for individual machines (for hot rolling and heavy plate mills). Energy-efficient solutions over a broader product range (CSP®/USP) are gaining in importance. In the cold rolling sector, we expect greater demand for smaller, expandable rolling capacities as well as plants for special grades and niche products. Also evident is a growing market for simple steel qualities in the threshold/developing countries.

We expect an upswing on the aluminum market in Europe and the USA, driven by lightweight automotive construction. The increased use of aluminum in automotive manufacturing will lead to further investments in plant.

There will be a focus here on cold rolling mills for the production of special surface qualities as well as strip processing lines. In all areas, the number of inquiries for turnkey projects is on the rise.

Considering this situation, we are focusing more than ever on developing solutions that reduce overheads, ensure reproducibility, improve quality, and meet en-vironmental standards. This includes descaling equip-ment, strip cooling strategies, MultiFlex-Quench®, strip end bending for high-strength strip; but also the use of especially powerful drive components for lower-cost modernizations, and increased productivity of fast aluminum cold rolling mills with engineering solutions that actively reduce vibrations.

HOT ROLLING MILLS

Acroni, Slovenia: MultiFlexQuench® for heat treatment of heavy plateSlovenian steel producer Acroni placed an order with SMS Siemag for a heat treatment line for heavy plate and for the modernization of a stainless steel anneal-ing and pickling line. This will be the first time SMS installs its newly developed MultiFlex-Quench® in a heat treatment line. The innovation offers impressive versatility and high cooling performance in the heat treatment of heavy plate.

Acroni, a company in the Slovenian Steel Group (SIJ), is a highly specialized niche supplier focusing on plate and strip in stainless grades, tool steels, abrasion-resistant steels, and HSLA grades. The new heat treatment line will give Acroni the opportunity to expand its product portfolio further.

Commissioning is scheduled for 2016. In 2013, SMS supplied Acroni with a new 2.6-m heavy plate stand and a roller quenching station.

ArcelorMittal Gent: Modernization of hot strip lineArcelorMittal awarded SMS Siemag a contract to modernize its seven-stand hot strip mill in Gent, Belgium. Included in the order is installation of new finishing stands F1 and F2 as well as modifications of stands F3 and F4. This revamp will markedly im-prove product quality, and also expand the product portfolio in the area of high-strength grades and multiphase steels.

The conversion work will be carried out in two stages during short shutdowns. SMS has drawn up a modernization plan that will ensure hardly any disruption of running production and requires only minor adjustments to the existing equipment.

Dieter Rosenthal,


Board SMS group

Heads of DivisionFrank-Günter Benner

Stephan Krämer

Michael Schäfer

30


Xichang Steel: Slab sizing pressPIETC Panzhihua Co., Ltd., China, contracted SMS to extend its roughing train with a slab sizing press in its hot strip line in Xichang City. The aim of the upgrade is to make the production process more flexible.

Xichang Steel produces carbon steels for pipelines as well as ships, bridges, and buildings. SMS Sie-mag already delivered the finishing stands for the hot strip mill in 2011. Now it will convert the 2,050-mm wide plant during a short downtime. Most of the preparatory work will be carried out in parallel to ongoing production.

Baosteel Zhanjiang: Cold plate levelerBaosteel Zhanjiang Iron & Steel Co., Ltd., China, ordered a cold plate leveler complete with X-Pact® automation from SMS Siemag. Once installed, the leveler will be part of the 4.2-m heavy plate mill SMS supplied in 2008, which Baosteel is relocating from Shanghai to its new plant in Zhanjiang, southern China, over the coming months.

Habaş: Hot strip millIn July 2014, the Turkish company Habaş successfully commissioned a hot strip mill in Aliaşa, Turkey, which was supplied by SMS Siemag. The first construction

stage of the compact hot strip mill is designed for the annual production of 2.5 million t of premium steel grades such as carbon steels, multiphase steels, or pipe grades up to strength class X80.

Included in the supply scope were the X-Pact® au-tomation with Level 1 and Level 2 systems complete with process models, the Level 3 production planning system, the technological measurement system, the instruments, sensors, industrial camera systems, and a common HMI for both automation levels.

Due to the supply from one source, Habaş achieved a rapid ramp-up of the plant and good strip qualities right from the start.

SDI: Modernization of CSP® plantIn October 2014, SMS Siemag modernized the CSP® plant of SDI (Steel Dynamics Inc.) in Columbus (Mis-sissippi), USA. Now, after the revamp, the plant SDI took over from Severstal in 2014 achieves better product quality and can be operated at lower pro-duction and maintenance costs. The modernization covered the feed area into the CSP® rolling mill, the drive of stand F1, and the laminar cooling. Due to the intelligent design of the components and good cooperation of everybody involved, the job was com-pleted in October 2014 in just 10 days.

Slab sizing press

ensures more flexible

production

31

COLD ROLLING MILLS

OAO Severstal, Russia:Modernization of tandem millRussian steel producer OAO Severstal awarded SMS Siemag a contract in spring 2014 to extensively modernize a cold tandem mill at its Cherepovets location in northwest Russia. OAO Severstal plans to increase the annual production of its tandem mill by 200,000 t as well as to broaden its product range and improve the strip quality. Included in the order is preparation for possible conversion in the future into a continuous pickling/annealing line.

The entry area and the four mill stands will be fully replaced. Then the tandem mill will feature state-of-the-art technology for precise, efficient rolling. Furthermore, it will be upgraded with X-Pact® au-tomation for the latest generation of Level 1 and 2 controls as well as new technological measurement systems. Together with our customer, we will imple-ment an operating method geared to the customer’s requirements.

The fully revamped plant will go into production in 2016. This modernization provides OAO Severstal with a cutting-edge tandem mill that stands out for low maintenance, green production, and efficient operation. Using its new plant, OAO Severstal will be able to produce strip made of carbon steel, high-strength grades, and microalloyed SI steels.

Tinplate Company of India (TCIL), India:Modernization of reversing rolling millTinplate Company of India Ltd. (TCIL) is a subsidiary of Tata Steel and a well-established company in In-dia. It boasts a market share in tinplate products of some 50%. In 2014, TCIL contracted SMS Siemag to modernize a reversing cold mill (RCM) used for rolling tinplate strip. Originally, the plant was supplied by SMS and commissioned in 1995.

Following this long period of nonstop service, the RCM will be thoroughly overhauled to bring it up to the latest technological standards. To do this, the SMS group is supplying the mechanical and electrical

equipment, including X-Pact® automation. All the conversion work will take place during two opera-tional shutdowns totaling 21 days. The modernized RCM will resume production in early 2016. In terms of performance, it will match any new plant.

Tisco, China:Production lines for stainless steel stripLast year, two newly integrated production lines for stainless steel cold strip went on stream at Shanxi Taigang Stainless Steel Company, a subsidiary of Tisco. They feature high-performance tandem mills, one in CVC® plus six-high design and one in 18-HS design.

Tisco has always valued premium quality, which is why it trusts SMS Siemag rolling mill technology. This has been demonstrated over the past 10 years, when we supplied five 20-roll cold rolling mills to the Shanxi Taigang Stainless Steel Company.

Close to the company’s 80th anniversary in August 2014, the two new production lines went into oper-ation. The first strip rolled off the TCM 400 on May 29, 2014.

Then, on June 30, 2014, this success was repeated on the TCM 300. What’s special here is that the TCM 300 is the world’s first five-stand tandem mill in 18-HS design. Its slim, horizontally stabilized work rolls enable high pass rates.

Gazi Metal, Turkey: Cold rolling millOn October 30, 2014, Gazi Metal Mamulleri Sanayi Ve Ticaret A. S. (Gazi Metal) produced the first coil on its new cold rolling mill. Particularly convenient for our customer was that the key production plants for the new cold strip complex came from one source: the SMS group. Specifically, we supplied a semi-continuous pickling line with horizontal looper, an acid regeneration plant, a single-stand reversing cold rolling mill, and a skin-passing plant.

Following the run-up phase, Gazi Metal will roll a broad spectrum of grades, including low-alloy carbon steels and non-grain-oriented silicon steels.

Operating solution

tailored to the customer

32


ALUMINUM ROLLING MILLS

Aluminium Norf, Germany:Modernization of hot rolling millIn February 2014, Aluminium Norf GmbH awarded us an order to expand its three-stand finishing train. That’s how ALUNORF will complete the modernization of its aluminum hot rolling mill No. 1. The original mill, supplied by SMS, has been in operation since 1967.

What the company will achieve from the three-phase upgrade is increased production capacity. The first stage, modernization of the rougher, was success-fully wrapped up in early 2014. Then came Stage 2, installation of a new edger for the roughing stand at the end of 2014. Next on the agenda is Stage 3, consisting of a fourth mill stand that matches the capacity of the finishing train to that of the rough-ing train. The extended finishing train will go into production at the beginning of 2016.

All three conversions will take place during short shutdowns over the Christmas/New Year periods. This is how we will succeed in bringing the almost 50-year-old aluminum hot rolling mill up to the latest technology standards, making it ready for future requirements.

Aleris, USA: Combined reducing and EDT cold rolling millAleris is a global leader in the production of aluminum rolled products. To upgrade its Lewisport location in Kentucky, USA, the company ordered a single-stand combined reducing and EDT cold rolling mill in CVC® plus six-high design from SMS.

Once installed, the new plant will produce premium-quality strip in widths of up to 2,350 millimeters, enabling Aleris to serve the anticipated increased demand from the North American automotive industry for aluminum body parts.

All the core components of the technologically groundbreaking cold rolling mill will be manufac-tured in SMS group workshops. Prior to delivery, we will prepare the plant for fast commissioning by performing extensive integration tests on the X-Pact®

electrical and automation systems. Also included in the complete supply package is a powerful Airwash™ waste air cleaning system that recovers valuable rolling oil from the waste air for reintroduction to the process. This ensures eco-friendly, resource-saving operation.

Ma’aden Aluminium, Saudi ArabiaThere was no time wasted in the erection of a state-of-the-art production plant in Ras Al Khair. The alu-minum hot and cold strip facility was built within just a few years. It produced the first marketable can strip on June 24, 2014.

Here, in Ras Al Khair, the Saudi Arabian company Ma’aden has entered into a joint venture with US-based, globally leading aluminum producer, Alcoa. The integrated plant forms the core of a new “indus-trial city” for aluminum production and processing in the Gulf region.

SMS is the complete supplier of all the hot and cold rolling plants Ma’aden Aluminium will use in the first phase to make aluminum strip for beverage cans. Meanwhile, the first strip produced has been certified by beverage companies as top quality. Scheduled to go on stream 2015, the second phase will add prod-ucts for automotive and architectural applications as well as foil starting material.

Shandong Nanshan, China:New cold and hot rolling millActually ahead of schedule, on December 18, 2014, the new cold rolling mill belonging to Chinese alu-minum producer Shandong Nanshan Aluminium Co., Ltd. successfully produced its first strip.

This is the fourth cold rolling mill Shandong Nanshan has sourced from the SMS group. It was supplied complete with the auxiliary equipment, including Multi-Plate® filter and Airwash™ waste gas cleaning system. The plant is exceptional on the Chinese alu-minum market, because it features rolling technol-ogies specially developed for aluminum automotive plate. Other customers for this high-quality strip are manufacturers in the aviation industry.

50-year-old plant

brought up to latest

technology standard

33

On December 30, 2014, the new plate and roughing stand of Shandong Nanshan Aluminium Co. Ltd. at the Longkou location in Shandong Province, China, was commissioned. The plate stand is part of the new 1+5 hot rolling line for aluminum and aluminum alloys. It consists of a reversing plate stand and a five-stand finishing train scheduled to go into opera-tion in early 2015. The SMS group also supplied the media systems, the coil inspection line, and the coil transport system. The products produced here go to the packaging, automotive, and aviation industries.

Jilin Midas, China:Aluminum cold rolling millIt was a special day for Jilin Midas Light Alloy Co., Ltd. on August 8, 2014. That was when the first aluminum strip rolled off the new, high-tech cold rolling mill in Liaoyuan City, China. This meant the Chinese company, founded as recently as 2011, had achieved its goal of building its own production plant for aluminum flat products.

A major advantage of the new cold rolling plant is its versatility and capability of rolling a wide prod-uct range incorporating aluminum strip of material classes 1XXX to 8XXX. SMS equipped the single-stand, six-high cold mill with CVC® plus and other ad -vanced rolling technologies. They ensure the required high strip quality as well as efficient operation. Ca-pable of producing strips up to 2,200 millimeters wide and with final gages of down to 0.1 millimeters, the plant covers a broad range of market requirements. The annual production capacity is 100,000 t.

Complete supply package

including auxiliary plants

and environmental

systems

34



HOT ROLLING MILLS− Big River Steel LLC, USA; CSP® plant− PIETC Panzhihua Co. Ltd., China;

sizing press for hot strip rolling mill in Xichang− EPS Siderúrgica Nacional C. A., Venezuela;

twin-stand Steckel hot rolling mill− ArcelorMittal Gent, Belgium;

replacement of stands F1 and F2 with new, more powerful stands, plus alteration of stands F3 and F4

− Acroni, Slovenia; MultiFlex-Quench® for heat treatment of heavy plate

− Baosteel Zanjiang Iron & Steel Co. Ltd., China; cold plate leveler for the 4.2-m heavy plate line

− Fujian Fuxin Special Steel Co. Ltd., China; slab grinding plant

− JSW Steel Ltd., India; modernization of the CSP® plant in Dolvi

COLD ROLLING MILLS− Big River Steel LLC, USA; pickling tandem mill (PLTCM)− Big River Steel LLC, USA; skin-passing mill (SPM)− Big River Steel LLC, USA; inline skin-passing mill (ISPM)− OAO Severstal, Russia;

modernization of tandem cold mill (TCM)− SSAB, Sweden;

modernization of tandem cold mill (TCM)− Tinplate Company of India (TCIL), India;

modernization of reversing cold mill (RCM)− Outokumpu Nirosta, Germany;

modernization of 20-roll cold rolling mill− VDM Metals, Germany;

modernization of 20-roll cold rolling mill− Starcore, Thailand; skin-passing mill (SPM)

ALUMINUM ROLLING MILLS− Aluminium Norf GmbH, Germany;

expansion of hot rolling mill with finishing stand− Aleris Rolled Products Inc., USA;

combined reducing and EDT rolling mill− Tianjin Zhongwang Aluminium Co, Ltd., China;

Phase 2: three-stand TCM and one CRM

HOT ROLLING MILLS− Habaş Sinai Ve Tibbi Gazlar Istihsal Endustrisi A. S.

Turkey; compact hot strip mill− Steel Dynamics, Inc., USA;

modernization of the CSP® plant in Columbus− Hyundai Steel, South Korea;

expansion of the 5.0-m heavy plate mill− Wuhan Iron & Steel Co. Ltd., China;

coiler modernization− ArcelorMittal Gent, Belgium;

modernization of power trains F1 and F3− Novolipetsk Steel, Russia;

modernization of hot rolling mill 2000

COLD ROLLING MILLS− Tisco, China; two tandem mills (TCM)− Gazi Metal, Turkey;

cold mill complex with reversing cold mill (RCM), skin-passing mill (SPM), pickling line, and acid regeneration

− Hoa Sen, Vietnam; reversing cold mill (RCM)

ALUMINUM ROLLING MILLS− Ma’aden Aluminium, Saudi Arabia;

hot and cold rolling mills, Phase 1− Shandong Nanshan, China;

combined reducing and EDT cold rolling mill− Shandong Nanshan, China; plate and rougher stand− ASAŞ Alüminyum, Turkey;

CVC® plus six-high cold rolling mill− Shandong Weiqiao, China;

two CVC® plus six-high cold rolling mills− Henan Yulian Energy, China;

CVC® plus six-high cold rolling mill− Jilin Midas Light Alloy, China;

CVC® plus six-high cold rolling mill− Guangxi Alnan, China;

CVC® plus six-high cold rolling mill

35

BIG RIVER STEEL AND SMS GROUP BUILD USA’S MOST ECO-FRIENDLY STEELWORKS

Big River Steel LLC, USA, awarded the SMS group an order to build a complete steelworks in Mississippi County, Arkansas, USA. The order covers the steelmak-ing plants, the secondary metallurgy, a CSP® plant, a coupled pickling/tandem mill, and the strip processing line. As a systems supplier, SMS is supplying all the plants including the electrical and automation systems as well as the environmental technologies.

What Big River Steel wants to achieve with this facility is the production of not only hot strip in various qualities, but also carbon steel cold strip, and cold strip contain-ing non-grain-oriented (NGO) silicon steel. This latter material is vital in the electrical industry, for instance for the rotating parts of motors. The continuous process route produces hot-dip-galvanized cold strip including multiphase steel strip, which is ideal for applications in the automotive industry – above all for structural parts.

Once the first construction stage is completed, the complex will produce 1.5 million t/year of hot strip for direct downstream processing into cold strip and galva-nized plate. Subsequently, further expansion stages are planned to gradually double production and expand the electric plate portfolio.

Scope of supply of the SMS group:− 150-t electric-arc furnace− 150-t ladle furnace with two treatment stands− 150-t RH-TOP plant− Gas recovery plant− High-current supply including the transformers for

the DC electric-arc furnace (EAF)

Ground-breaking ceremony (left to right): John Correnti, CEO of Big River Steel, Dr. Heinrich Weiss, Chairman of the Supervisory Board of the SMS group, Mike Beebe, Governor of Arkansas.

Location: Mississippi County, Arkansas, USA

PRODUCTION OF STATE-OF-THE-ART STEELS

− Single-strand CSP® plant with six mill stands, suit-able for expansion to two strands up to 1,930 mil-limeters wide

− Pickling tandem line with equipment including CVC® plus, hydraulic adjustment, multizone cooling, emulsion system, and innovative vapor extractor

− Offline skin-passing mill (SPM) with a rolling force of 18 MN

− Inline skin-passing mill (ISPM)− Continuous hot-dip galvanizing line (CGL) with Drever

furnace, ultra-fast-cooling system for high-strength, dual-phase grades, FOEN air knife system, and more

− Batch annealing furnace (BAF)− X-Pact® electrics and automation

36

Annual Report 2014Tube & Pipe Plants

Manufacturing tubes & pipes cost-effectively even in small batches

Innovations for more productivity and less energy

Pipes for the oil industry

TUBE & PIPE PLANTS

37

Sales by the Tube & Pipe Plants Division in 2014 were higher than in the previous year. Just as positively, order intake reached the same good level as in 2013.

Looking at seamless tubes and pipes, demand for special products (premium tubes) grew, while we also identified a trend toward small plants geared to local markets. We also see growth potential due to the fact that ever more, and better, pipes are required for exploration to ensure a constant supply volume. Generally, the market for new plants remained weak. This is mainly due to overcapacities on the market for OCTG (Oil Country Tubular Goods) as well as current geopolitical problems. However, there is plenty of potential in modernizations of existing plants.

Demand for turnkey plants for large pipes – espe-cially in the MENA region (Middle East and northern Africa) remained strong. That included growing de-mand for 18-meter-long pipes. Here again, we see potentials for modernization business – especially with regard to automation, energy efficiency, and welding technology.

The characteristic of the market for ERW pipe and tube welding plants was an increasing saturation in the line pipe segment (pipelines), as opposed to a growing demand for OCTG grades used for struc-tural pipes. Spiral-welded tubes and pipes are well established in the higher-quality area – so-called API grades. Demand for these grades increased in 2014 because of higher quality requirements of the end products. Nevertheless, there is intense price pressure, which we will respond to with individual solutions for our customers.

MANUFACTURING TUBES & PIPES COST-EFFECTIVELY EVEN IN SMALL BATCHES

Beisteel Group based in Haicheng in Liaoning Pro-vince, China, awarded SMS Meer an order for a JCO® pipe forming press for its plant in Yingkou. It will be used to manufacture longitudinal-seam-welded large pipes (LSAW) in lengths of up to 18 meters. The annual capacity of the plant is some 250,000 t. Also built in here is the speed-variable pump control system for the JCO® pipe forming press. It can cut energy consumption by 30% compared to conventio-nal hydraulic systems. The new press is also capable of rapidly switching the JCO® process to other pipe dimensions. That means Beisteel can produce even small batches cost-effectively.

INNOVATIONS FOR MORE PRODUCTIVITY AND LESS ENERGY

CSI Tubular Products, Inc. (CSI) of Fontana in Califor-nia, USA, commissioned a 24-inch high-frequency pipe welding line from SMS in 2014. The machine achieves a production rate of up to 35 meters per minute. Specifically for CSI, SMS improved the process and plant technology. Also new in 2014, a spiral tube plant from PWS went into production at Zhejiang Kingland Pipe Industry in Huzhou City, Zhejiang Province, China. Thanks to its PERFECT® arc solution, the plant meets our Ecoplants sustain-ability criteria and uses up to 30% less energy than conventionally engineered plants. Furthermore, it is up to 20% more productive.

Marcel Fasswald,


Board SMS group

Heads of DivisionFrank Lüth

Norbert Theelen

38

Annual Report 2014Tube & Pipe Plants

Nippon Steel & Sumitomo Metal Corporation (NS-SMC) contracted PWS to convert two existing online spiral tube machines to the two-stage procedure that separates spiral tube forming and finishing welding. This improves the weld seam and pipe geometry as well as increasing the production capacity – even with almost the same number of personnel.

PIPES FOR THE OIL INDUSTRY

Axis Pipe and Tube of Houston, Texas, USA, ordered a heat treatment station and a tube thread-cutting line from the SMS group for its plant in Bryan. Equipped with these two plants, the company can produce OCTG pipes for gas and oil transport. The heat treat-

ment station features a hardening furnace and an annealing furnace, a water quenching unit, and a hot straightener. Then there is the tube thread-cutting line consisting of two thread-cutting machines that remain stationary while the tubes rotate. Added to this are a tube inspection press with a maximum test-ing pressure of 15,000 psi, a finishing area, and the connecting transport equipment for the thread-cutting line that also come from SMS. All the equipment for a seamless tube plant ordered by Tenaris in the USA were manufactured in 2014, and assembly began the same year. Owing to the fact that Tenaris made good progress with construction of its new industrial plant in Bay City, Texas, the first parts were already delivered in the first quarter of 2015.


SEAMLESS TUBE PLANTS– WEM, China; KPW 18LC+, 25LC+, 50LC+– Jiuli Group, China; KPW 25, 50LC– Baoyin Special Steel, China; KPW 25LC

LARGE PIPE PLANTS– Corinth Pipeworks, Greece; 26" hydrotester– Beisteel Pipe Group, China; JCO® tube forming press

PIPE WELDING PLANTS– Atlas Tube, Canada; modernization of ERW RD 410

SPIRAL TUBE PLANTS– NSSMC, Saudi Arabia; two-stage manufacturing

process including PERFECT® arc– Altumet Spa, Algeria; tube end machining center

FINISHING PLANTS– Axis Pipe (Prolamsa), USA;

heat treatment station, thread-cutting machine– JFE Steel, Japan;

CG 43/4CNC thread-cutting machine

SEAMLESS TUBE PLANTS– US Steel, USA; modernization of mandrel mill– Vallourec Mülheim, Germany; hydrotester– Tubacex, Spain; hydrotester

LARGE PIPE PLANTS– ITZ, Russia; 25 MN-GCP® closing press

PIPE WELDING PLANTS/FINISHING PLANTS– Arvedi Metalfer do Brasil, Brazil; HF tube welding

plant, RD 140 including finishing equipment– CSI Tubular Products, USA; 24” HF tube welding line– Interpipe Niko Tube, Ukraine;

three-axis bore processing machine

SPIRAL TUBE PLANTS– Kingland Group Co., China; spiral welding plant

Tenaris meets demand

for high-strength

precision pipes

39

AS-PLANNED IMPROVEMENTS BENEFIT OUR CUSTOMERS

Technology modules for welded tubes and pipesImportant on a market with overcapacities is not just increasing productivity, but also optimizing products and quality. We always keep this in mind during our cooperation with customers.

Working closely with our customers, we have improved the production processes and quality of the tubes and pipes they produce over recent years. Yet the improve-ments did not stop at new plants and machinery – we are also constantly optimizing the technology applied in existing systems. Currently, our “Technology Partnership” strategy offers twelve modules our customers can use to enhance their plants’ efficiency at relatively low cost.

New since 2014 are the two modules Shape and PERFECT® arc, which now also provide solutions for welded tubes and pipes.

The Shape automation system developed by SMS Meer controls the shaping process fully automatically. To do this, it constantly provides information about the relevant properties of the tubes and pipes produced. As soon as deviations from the target values arise, the solution automatically corrects them.

Our PERFECT® arc innovation is designed for electric-arc and submerged-arc welding. Compared to conventional welding, it performs tack welding up to 50% faster and

Thanks to the new PERFECT® arc process, tubes and pipes can now be tack-welded up to 50% more quickly.

submerged-arc welding up to 20% faster. The newly developed PERFECT® arc welding current sources do not require transformers, work with an IGBT (insulated-gate bipolar transistor), and control the welding current completely digitally. As a result, the welding machines achieve a degree of efficiency of more than 90%. This means in turn that the productivity of spiral tube plants and plants for longitudinal-seam large pipes can be dou-bled or even tripled, depending on the design. Equally important is the high energy saving. Due to precision control of the energy input via the digital power source, the system cuts energy costs by up to 30% compared to conventional welding technologies.

[1] | The variable speed pump control system can be installed in all pipe forming presses and reduces energy consumption by up to 30%. [2] | The Corinth Pipeworks plant in Thisvi. The SMS group supplied the entire infrastructure for pipe production.

[1] [2]

40

Annual Report 2014Long Products Plants

Market situation for long products remains tense

First fully integrated iron and steelworks in the Gulf region commissioned

Saarstahl relies on technology from SMS Meer

Rebar steelworks for Rabigh Steel, Saudi Arabia

EUR 180 million order for SMS group from Russia


41

In 2014, the tense market situation for long products continued. That’s because overcapacities and political crises created a difficult climate for corresponding investments. Particularly onerous for the SMS group are the financial crisis and sanctions against Russia as one of our key sales regions.

SECTION AND BILLET MILLS

United Steel Company (SULB) of Hidd in Bahrain successfully commissioned a new minimill for beams and long products. It is the first fully integrated iron and steelworks in the Gulf region, producing the entire range of light, medium, and heavy long products. What especially stands out is a compact rolling group consisting of three CCS® (Compact Cartridge Stand) stands with hydraulic roll adjustment. Also included in the package is a CRS® (Compact Roller Straightener), a nineroll machine with doublebearing straightening rolls as well as hydraulic roll adjustment. As a final point, the hydraulic control systems ensure rolling to close tolerances. The entire plant is designed for rapid format changes within just 20 minutes. All this helps secure the wide spectrum of products, ranging from beams measuring 100 × 100 millimeters to 900 × 300 millimeters, as well as Usteel, angled long products, and sheet piles.

Panzhihua Steel & Vanadium ordered a threestand CCS® tandem group for its new rail and long products rolling mill in Panzhihua, China. It was a pleasure receiving this order because it continues the close cooperation between the two companies. Once equipped with the new plant, Panzhihua will be able

to react flexibly to fluctuating demand for rails, beams, and special long products.

ArcelorMittal Belval in EschsurAlzette (Luxembourg) contracted SMS to supply a CRS® (Compact Roller Straightener) for sheet piles as a turnkey plant complete with all the necessary changing systems. Included in the scope of supply are the mechanical equipment, electrical and automation systems, and all the systems for changing the straightening rolls.

Saarstahl AG, Germany, ordered a total of three revamps for its plants in Völklingen, Burbach, and Neunkirchen. Special about the new continuous line for the Völklingen location is that it consists of seven mill stands in CS (Compact Stand) design and vertical/horizontal array. Starting with various bloom formats, it rolls different input crosssections for the downstream intermediate line. To manage the forces applied here, this type of stand is designed for high stresses and large formats.

A major revamp project progressed on schedule in 2014 when we completed stage two of the upgrade of long product rolling mill NYS No. 1 at NucorYamato in Blytheville (Arkansas, USA). The focus of this second modernization step was the replacement of the old universal finishing stand. Now the customer operates a new finishing stand in CCS® design with hydraulic adjustment, roll gap control under load, and fast program changeover in 20 minutes. Following completion of the modernization project, which consists of three stages, NucorYamato will be able to increase its product range to larger sheet piles, tapping into new market segments.

Marcel Fasswald,


Board SMS group

Heads of DivisionMarco Asquini

Robert Bignulini

42


LIGHT SECTION MILLS

Last year, NLMK in Kaluga, Russia, commissioned a rebar and bar steelworks. It uses the plant to produce rebars at high speed as well as small and mediumsized long products. As a result, NLMK can now react flexibly to emerging market demands.

BAR AND WIRE ROD MILLS

Saudi Arabian company Rabigh Steel ordered a rolling mill from us. It consists of a pusher furnace with a capacity of 62 t per hour, twelve housingless mill stands in horizontal and vertical array, one eightstand finishing block in V array, a thermal processing system, a highspeed delivery (HSD®) system, a cooling bed, and the final processing equipment. Also part of the scope of delivery is a watertreatment plant. The HSD® system ensures the bars reach the cooling bed safely even at high speeds. Located in the industrial zone of Rabigh, the plant will produce 300,000 t of rebar steel in diameters ranging from 10 to 36 millimeters.

Deutsche Edelstahlwerke (DEW) operates the world’s first 3roll PSM® (Precision Sizing Mill) with hydraulic roll adjusting under load at its plant in Siegen, Germany. Particularly impressive is the plant’s MEERgauge® measurement technology. In 2014, DEW ordered a new raketype cooling bed for its location in Siegen, Germany. This system ensures controlled

cooling, surfaceprotecting transport, and extremely straight final products. That means it meets all the requirements made of quality steel.

So, in the future, the company will be able to use the cooling bed not only for bar steel with diameters of 21.5 to 90 millimeters, but also for hexagonal sections.

Nucor Steel Memphis (Tennessee, USA) awarded us the contract to revamp a stacking plant. Now, with the modernized stacking equipment, Nucor Memphis can produce not only rectangular coils, but for the first time also hexagonal coils. Engineered for round crosssections, the upgraded system can stack between two and 34 bars in up to five layers. It stacks rectangular formats in two layers of one to six bars. An extra bonus is that the system also improves the quality of the coils. Due to its fully automated operation, the plant does away with manual correcting and cuts production time.

Working for another customer in the USA – Steel Dynamics (SDI) – SMS expanded their existing bar steel mill. That raised SDI’s production capacity by 50% and extended its product range – in particular adding Special Bar Quality (SBQ) materials. Today, with its SBQ products, Steel Dynamics is successfully tapping into new and lucrative sales markets, for example in the aviation and aerospace industries, automotive production, and the transport and energy sectors.

300,000 t of rebar

steel in the industrial

zone of Rabigh,

Saudi Arabia

44



SECTION AND BILLET MILLS– Saarstahl AG, Germany;

sevenstand CS roughing mill– ArcelorMittal EschBelval, Luxembourg;

CRS® straightener for piles– Panzhihua Steel & Vanadium Comp., Ltd., China;

finishing stands for rail and long product rolling mill with an annual capacity of 700,000 t

– Hyundai Steel, South Korea; modernization of the tandemreversing mill

LIGHT SECTION MILLS– LLC Tulachermet Steel, Russia;

two light section and SBQ rolling mills (capacity of each mill: 705,000 t/year)

BAR AND WIRE ROD MILLS– Nucor Memphis, USA;

modernization of stacking equipment– Deutsche Edelstahlwerke, Germany;

modernization of cooling bed– LLC Tulachermet Steel, Russia;

wire rod outlet– TungHo Steel, Taiwan;

rebar rolling mill No. II (capacity: 700,000 t/year)– Rabigh Steel, Saudi Arabia;

rebar rolling mill with a capacity of 300,000 t/year– ArcelorMittal Zenica, Bosnia Herzegovina;

two VCC lines– Saarstahl AG, Germany;

roughing mill stands and shear

SECTION AND BILLET MILLS– SULB – United Steel Company, Bahrain;

heavy section mill with an annual capacity of 600,000 t– Nucor Yamato Steel Company, USA;

modernization of medium section steel mill– Stahlwerk Thüringen GmbH, Germany;

modernization of roll straightener– Handan Iron & Steel Group Co. Ltd, China;

rail and section mill (capacity: 1,300,000 t/year)– Jindal Steel & Power Ltd., India;

modernization of cooling section

LIGHT SECTION MILLS– NLMK CJSC “KSIEMP” Kaluga, Russia;

rebar and merchant bar mill

BAR AND WIRE ROD MILLS– Xining Special Steel Co. Ltd., China;

rolling mill for special bar qualities (SBQ) with PSM®

– Steel Dynamics, Inc., USA; modernization of the SBQ rolling mill (rougher including BD roughing stand, fourstand threeroll PSM®, MEERgauge®, shear systems); plus: new stacking equipment

– RIZHAO Steel Holding Group Co., Ltd., China; twostrand wire rod finishing mill

45

EUR 180 MILLION ORDER FOR SMS GROUP FROM RUSSIA

Despite a difficult overall order situation, SMS attracted a major order from Russia in 2014. During the Tube & Wire 2014 trade show, Tulachermet Steel and the SMS group signed a contract for a complete steelworks with downstream billet continuous caster and two light section mills. The order is worth some EUR 180 million. It covers the construction of a converterbased steel and rolling mill complex right next to the Tulachermet ironworks in Tula – approximately 200 km south of Moscow.

Envisaged is a first phase with rolling lines for light sections, bar steel, and wire rods and a capacity of 1.5 million t per year, which can be expanded later to two million t. Most of the production quantity will be supplied to Moscow and other regions in central Russia. Much in demand there are highquality steel products particularly in the construction industry, as well as with mechanical engineering companies and automotive manufacturers.

The steel and rolling mill complex will go into production in 2016. SMS is supplying two almost identical light section mills, each fed by a walkingbeam furnace with a capacity of 160 t per hour. One of these light section mills features a wire rod mill that enables our customer to produce quality steel in the form of bar steel and wire.

Location: Tula, Russia

COMPLETE STEELWORKS WITH BILLET CONTINUOUS CASTER AND TWO LIGHT SECTION MILLS

Contract signing at the SMS Meer trade show stand at Tube & Wire in April 2014.

[1] | Glowing billets in the continuous caster. [2] | Mill stands in the roughing train of a light section rolling mill.

[1] [2]

46

Annual Report 2014Processing Lines

All steel treatment processes covered

First orders for batchtype annealing line and CSP® furnace

Success with heat treatment lines for heavy plate and tubes

Trend toward highstrength steels and heattreated aluminum alloys for reducing weight in vehicle manufacturing


47

Demand on the Chinese market weakened in business year 2014 after the country had been one of the main engines behind sales of strip processing lines in the previous years. Projects in Russia, Eastern Europe, and the Middle East were partly postponed or even canceled due to political uncertainties. Despite this gloomy market environment, the division was able to significantly strengthen its order intake in 2014. Sales remained stable compared to the previous year.

Delighted to receive orders for a total of four new strip processing lines incorporating all the main elements of steel treatment, the division defended its leading position on the market.

Two major trends are beginning to emerge for the coming years: First, plants for manufacturing materials that reduce weight and cut fuel consumption in motor vehicles (highstrength steels, heattreated aluminum alloys). And second, plants for producing packaging materials (tinplating lines).

Moreover, for the first time we secured orders for a batchtype annealing line and a CSP® furnace. Further orders comprise a heat treatment line for heavy plate and another for tubes. These were successes we attained on new markets we have not served in the past.

WUPPERMANN ORDERS “HEAT-TO-COAT” PICKLING AND HOT-DIP GALVANIZING LINE

The Wuppermann group, a familyowned company with 140 years of experience in steel processing, contracted us to supply a “heattocoat” hot strip pickling and hotdip galvanizing line for its new plant in GyőrGönyű, Hungary. SMS is responsible for the entire line including mechanical equipment, process engineering, plus electrical and automation systems.

Scheduled to go into production in 2016, the new strip processing line will handle some 500,000 t of steel per year. It will treat strip widths of between 400 and 1,650 millimeters and gages of 1.0 to 6.0 millimeters.The input material is scaled hot strip, which the line pickles, heats up to galvanizing temperature, galvanizes, skinpasses, and posttreats to give it a longlife corrosion protection, attractive appearance, and enhanced mechanical robustness. What makes this “heattocoat” process stand out is its high profitability, because all the processes take place in a single facility. Wuppermann supplies hotdip galvanized wide and slit strip to customers throughout Europe and even as far away as in the USA. Listed among the purchasers of the galvanized hot strip are companies in the automotive and construction industries as well as fittings, tube and pipe, and component manufacturers. There is also the option of skipping the galvanizing section to produce pickled, oiled material.

PICKLING/TANDEM MILL, HOT-DIP GALVANIZING LINE, AND COMPLETE FURNACE TECHNOLOGY FOR BIG RIVER STEEL

Integral elements of the SMS group’s scope of supply for the Big River Steel project in the USA are a pickling/tandem mill and hotdip galvanizing line as well as the complete furnace technology consisting of a CSP® furnace, a continuous annealing furnace, and a batchtype annealing line. This is the first time a customer has benefited from the application of all the heating and cooling expertise over the entire process chain from one source, ensuring high material quality.

The CSP® plant comes with a roller hearth furnace linking the continuous caster and the rolling mill. There are ecofriendly, ultralowNOx burners in the furnace to control, maintain, and equalize the

Harald Rackel,


Board SMS group

Heads of DivisionDr.-Ing. Holger Behrens

Dr.-Ing. Fritz Brühl

Michael Cottin

48


temperature of the thin slabs. What’s more, special watercooled rollers for slab transport increase the energy efficiency.

The pickling tandem mill is equipped with an XPro® laser welding machine, a scale breaker, a turbulence pickling section, and a fivestand tandem mill. It is capable of processing almost 1.5 million t of steel strip per year.

Special to the universal annealing and hotdip galvanizing line is the option of bypassing the zinc pot with a cold guide roll for operation as a pure annealing line. So, depending on market demand, the customer can offer two different products (annealed or galvanized) for maximum costeffectiveness.

The batchtype annealing section anneals and cools the cold strip coils in a batch process. It features a heating system that uses lowNOx technology to comply with strict US environmental standards.

TOSYALI-TOYO ORDERS RESOURCE-SAVING TINNING LINE WITH SOLUBLE ANODES

TosyaliToyo Ltd., the TurkishJapanese joint venture between Tosyali Holding and Toyo Kohan, awarded SMS a contract for supplying an electrolytic tinning line. This line will be a key element in the new steel mill for the production of packaging materials to be constructed in Osmaniye, in southern Turkey. From late 2016, 255,000 t per year of very thin steel sheet will be coated with a fine layer of tin as corrosion protection. Then the highquality tinplate will be used as packaging material for foods or aerosols.

One reason why TosyaliToyo selected the SMS group as the supplier is because the line, consisting of a large number of highperformance components, will be supplied from a single source complete with the mechanical equipment, process technology, and electrical and automation systems. Also included

in the supply package are ancillary units such as the evaporation unit and anode casting equipment.

WORLD’S LARGEST ANNEAL-ING AND PICKLING LINE COMMISSIONED AT TISCO

Working at Chinese stainless steel producer Tisco, we commissioned the world’s most productive hot strip annealing and pickling line. It can produce one million t of ferritic and austenitic stainless steel strip per year. Now, with this plant, in Taigang in Shanxi Province, up and running, Tisco has expanded its capacities for highquality stainless steel strip and simultaneously reduced production costs. The line features modern process and environmental technologies so that it can meet all the requirements and standards for exhaust air and wastewater in an efficient, flexible production process. Furthermore, the high degree of automation and low maintenance help cut operating costs.

OPTIMIZED HEAT TREATMENT OF AUTOMOTIVE ALUMINUM STRIP

Integrated in the heat treatment line for aluminum is a floater annealing furnace followed by a cooling section that creates the material properties demanded by the automotive and aviation industries. The even, targeted heating and cooling over the entire length and width of the strip ensure the right hardness and grain size every time. This means the floater annealing furnace and downstream cooling are the key components of the heat treatment line and crucial to the high quality of the finished material. We also developed a model for furnace control as well as solutions for optimized flows in the furnace and watercooling section. That ensures increased furnace efficiency and enhanced quality of the finished aluminum strip.

Mechanical equipment,

process engineering,

and electrical and

automation systems

from one source

Flexible adjustment

to demand

49

Furnace modelWe are currently working on an integrated physical process model that monitors and controls the entire thermal process including the cooling equipment.

The model automatically calculates and deter mines the treatment curve and target values for the processes, taking into account the metallurgical properties and various alloys as well as the transitions between the individual coils. Furthermore, it includes the option of optimizing the coil production sequence in advance. This guarantees not only high process reliability and material quality, but also costeffective production.

Water coolingAnother key factor for the material properties of the strip is the cooling stage downstream of the an nealing furnace. A water quench rapidly quenches the strip with demineralized water sprayed on through several

nozzle beams. The special array of the nozzle beams in the cooling section minimizes the thermal stress in the strip. Moreover, the arcshaped floating nozzles installed before and after the cooling section induce lateral bending, which minimizes strip distortion caused by the stresses from cooling. FEM calculations are used for optimal design of the cooling section.

Flow optimizationFloating nozzles inside the annealing furnace ensure contactless transport through the furnace. Over the entire length of the annealing furnace, an air cushion keeps the strip afloat, while the hot air from the floater nozzles evenly heats it with a high heat transfer. The pressure loss inside the furnace is minimal due to CFD calculations that optimize the flows from the circulation fans through to the floater nozzles. This saves energy during operation as well as investment costs because the fan requires a less powerful motor.

Cooling system

crucial to strip quality

50



PROCESSING LINES AND FURNACE TECHNOLOGY– Wuppermann, Hungary;

hot strip pickling and hotdip galvanizing line including XPro® laser welding machine, furnace, and air knife system

– TosyaliToyo, Turkey; electrolytic tinning line– Big River Steel, USA;

CSP® furnace, continuous pickling/tandem mill, universal annealing and hotdip galvanizing line including furnace and air knife system, batchtype annealing line

– US Steel Košice, Slovakia; modernization of a continuous pickling line

– Outokumpu, Sweden; modernization of an annealing and pickling line for stainless steel hot and cold strip

– Ternium, Mexico; four fluidizedbed acid regeneration plants

– Surabaya Steel, Indonesia; sprayroaster acid regeneration plant

– Acroni, Slovenia; heat treatment line with two rollerhearth furnaces and MultiFlexQuench® for heavy plate, modernization of a stainless steel annealing and pickling line

– Baotou Iron & Steel, China; air knife systems for two hotdip galvanizing lines

– Timken, USA; heat treatment for tube/pipes– Evraz Vitkovice Steel, Czech Republic;

pusher furnace for slabs– LLC Tulachermet Steel, Russia;

two walkingbeam furnaces for billets– Rabigh Steel, Kingdom of Saudi Arabia;

pusher furnace for billets– JSPL Jindal Steel & Power, India;

walkingbeam furnace for billets– EPS de Tubos Sin Costura – SIDOR, Venezuela;

heat treatment for tube/pipes

PROCESSING LINES AND FURNACE TECHNOLOGY– ASAS, Turkey;

color coating line including drying furnace– Shagang, China;

electrolytic tinning line and tinplate annealing line including furnaces

– Gazi Metal, Turkey; semicontinuous pickling line including acid regeneration

– Tisco, China; hot strip annealing and pickling line for stainless steel

– Panzhihua, China; continuous annealing line including furnaces

– Guangxi Beihai Chengde, China; two furnaces in cold strip annealing and pickling lines for stainless steel

– Baosteel Desheng, China; furnace integrated in cold strip annealing and pickling line for stainless steel

– VAMA, China; two air knife systems for continuous cold strip treatment lines

– Handan, China; air knife system for a continuous hotstrip galvanizing line

– ThyssenKrupp Steel Finnentrop, Germany; modification of the entry section of a hotdip galvanizing line

– USSC Lorain, USA; modernization of a reheating furnace for pipes

– Outokumpu, Sweden; heat treatment line for stainless steel heavy plate (chamber furnace and quencher)

– Toscelik Niksic Alloyed Engineering Steel, Montenegro; rotary hearth furnace for reheating forged products

51

CONTINUOUS TINPLATE ANNEALING LINE AND ELECTRO-LYTIC TINNING LINE SUCCESS-FULLY COMMISSIONED

Last year, the new continuous tinplate annealing line and the electrolytic tinning line from SMS Siemag were successfully commissioned at the Shagang Group, China. As a systems supplier, the SMS group delivered all the components for both lines, including the mechanical equipment, process technology, furnace technology, and electrical and automation solutions.

In March 2014, the new tinplate annealing line successfully processed the first strip. Shortly afterward, in April 2014, the electrolytic tinning line came on stream and coated the annealed and skinpassed strip with a thin layer of tin. Since then, the new cold rolling mill in Jiangsu Province, eastern China, has been producing tinplate for packaging material.

Location: Jiangsu, China

TINPLATE ANNEALING LINE AND ELECTROLYTIC TINNING LINE

Beverage cans made of tinplate.

[1] | Electrolytic tinning line. [2] | Evaporation unit and rinsing water recovery.

[1] [2]

52

Annual Report 2014Forging Plants

Diverse development of market segments in the forging sector

New generation of extrusion presses

Machines make savings even with hard-to-process materials

Branching out into new dimensions

Worldwide trust in copper and aluminum plants from SMS

Concepts for higher energy efficiency

FORGING PLANTS

53

DIVERSE DEVELOPMENT OF MARKET SEGMENTS IN THE FORGING SECTOR

Sales by our Forging Plants Division increased by some 40% compared to 2013, while order intake remained at the same level. There were widely differing signals from the markets for the various products in 2014.

That’s why we see different market potentials for individual business areas. Generally, we will continue to cut costs through local production of some parts in our customers’ countries.

Just some ways we will do this are by systemati-cally adjusting sales, procurement, production and assembly, commissioning, and service to local market requirements. Equally important for our business are our intensive research and development activities, which generate solutions geared to current demands.

NEW GENERATION OF EXTRUSION PRESSES

New in the field of extrusion presses in 2014 was our latest development – the HybrEx®. HMT Hofer Metall Technik is the first company that opted for this innovation. It purchased and commissioned a HybrEx25 at its facility in Hettstedt in 2014. The machine significantly cuts energy consumption and increases productivity by up to 20%, easily meet-ing our Ecoplants criteria. What distinguishes the HybrEx25 is the groundbreaking drive technology it features. As a result, we were able to slash the oil tank volume from 10,000 liters to 1,000 liters. Furthermore, the gases bound in the oil are redu-ced from 10% to 1% – for a much longer useful life of the oil. Also new is the patented internal filling valve that makes main cylinder speeds of up to 1,000 mm/s possible. Improvements in the electri-cal drive technology additionally enhance the energy

balance. HybrEx® presses are equipped with the tried-and-tested “Power on Command” intelligent engine control system. This activates only the units necessary for the process cycle currently in operation. The new HybrEx25 achieves an auxiliary process time including air lift of under twelve seconds. To spell out just how much the SMS machine increases plant productivity: one second less auxiliary process time equals up to 100 t more output per year. SMS Meer sold four of these new HybrEx® presses in 2014.

MACHINES MAKE SAVINGS EVEN WITH HARD-TO-PRO-CESS MATERIALS

There was a significant upgrade at Metallurgical Plant “Electrostal” in the town of Elektrostal (Moscow region) in 2014. That’s because the company com-missioned a radial-axial ring rolling machine, a ring expander, and a radial forging machine from the SMS group. Compared to conventional models, the type RAW 400 (500)/200(250)-3000/600 DM radial-axial ring rolling machine uses much more compact rol-ling tools. It can even roll rings from stainless steel as well as nickel-based and titanium alloys, which are difficult to shape. The RKP 600-2500/600 ring expander saves up to 15% in materials. Moreover, the speed-variable drive means this machine is up to 40% more energy efficient. Electrostal uses the SMX 600/12 MN radial forging machine to forge bar steel and shouldered shafts. The benefits of this plant are better core forging and a higher productivity of up to three or four times that of standard forging presses.

BRANCHING OUT INTO NEW DIMENSIONS

TPCO Bohai of Tianjin, China, set a record in ring rolling in 2014. The company produced the world’s first 10 meter ring on its new radial-axial ring rolling machine from SMS Meer, breaking the previous record of 9.65 meters.

Marcel Fasswald,


Board SMS group

Heads of DivisionRalph-Andreas Surma

Ulrich Vohskämper

54


These seamlessly rolled rings can be used in vessel construction, in the chemical and pet rochemical in-dustry, in cement mills, or tunnel drilling machines, and they are also ideal in masts for the large wind turbines of the future.

Similarly, Otto Fuchs KG is also branching out into new dimensions. In 2014, the company invested in a hydraulic press from SMS Meer with a pressing force of 50,000 t (500 MN). The press will be erected at the subsidiary Weber Metals in southern California.

Carpenter Technology of Athens, Alabama, USA, commissioned a type SMX 1100/22 MN forging machine. It is the largest of its kind so far made by SMS. The machine applies a pressing force of 22 MN for each of the four cylinders.

WORLDWIDE TRUST IN COPPER AND ALUMINUM PLANTS FROM SMS

We also attracted an order from HELVEX in 2014. The Mexican company ordered a horizontal caster for brass billets and an extrusion press. HELVEX already operates a press plant, and with these new machines it aims to expand its production capacity and increase product quality.

Another Mexican company, Nacional de Cobre, com-missioned a continuous caster and a sawing line for copper and copper alloys in 2014.

Metallo-Chimique of Beerse, in Belgium, awarded SMS a contract to supply a carousel-type caster for copper anodes. This is the second plant of its type to be installed in the company’s main facility. Thanks to the high degree of automation and special mold cooling, Metallo-Chimique can now benefit from significantly lower production costs. Included in the scope of supply are a complete carousel-type anode casting machine with integrated turning device for anode packages. SMS Meer is supplying the plant with a dynamic cooling control system that ex tends the service life of the molds. The plant has a capacity of 50 t per hour.

Underlining its satisfaction with the SMS group, the Amer Group in China ordered two more CONTIROD® lines of type CR 3500. The parent company, Amer

International, has been operating a CONTIROD® CR 3500 for years in its Amer Tongling facility. The two new plants will be installed in the Goawei Copper works in YingKou Municipality, Liaoning Province, and at Amer in Gansu Province. Each of the lines has a capacity of 35 t per hour, and Amer plans to use them to triple its production volume and advance its position to China’s number-one wire producer. Specifically, the machines will manufacture ETP copper wire that is an essential starting material for electric conductors.

Another successful commissioning project in 2014 was performed by Ningbo Shimao Copper, based in Yuyao City, Zhejiang Province, China, which produced the first copper wire on its new CONTIROD® plant supplied by SMS Meer. The integrated casting and rolling plant carries our Ecoplants label, indicating that it is one of the SMS group solutions that signif-icantly save raw materials, reduce energy and fuel consumption, and minimize emissions.

STEADY DEMAND FOR ALUMINUM PLANTS FROM HERTWICH

Finnish profile manufacturer Purso Oy ordered a homogenizing plant for round billets from Hertwich Engineering, and commissioned it in 2014. Now the continuous homogenizing line replaces a separately operated chamber homogenizing and sawing plant. Fully automated, the plant requires less operating personnel. In addition, it cuts energy consumption by some 20%. What also counts is the improved homogenization quality of the round billets as it ensures more efficient, faster pressing.

Also active in India, Hertwich supplied a continuous homogenizing plant and a sawing plant for round billets to Hindalco Industries. The continuous line controls the temperature of all billets evenly, so Hin-dalco achieves optimum metallurgical microstructure properties. There was a specific reason for Hindalco to order the continuous homogenizing furnace, be-cause it is part of a production expansion program at the Mahan location. The annual capacity of the new line totals 64,000 t of aluminum, and it pro-duces billets with diameters ranging from 178 to 229 millimeters.

Immediately after hot

rolling, the rings at Bohai

measure 10.15 meters in

diameter, shrinking to

10 meters after cooling

55

Hertwich Engineering supplied two helical ultrasonic testing machines to Dubai Aluminium (DUBAL) in the United Arab Emirates for its casting plants. The new equipment increases the testing capacity at DUBAL so that the company can ensure good product quality and process higher quantities. Furthermore, DUBAL has ordered a chamber homogenizing plant from Hertwich. This is the fourth plant of its type Hertwich Engineering will supply to DUBAL. The chamber homogenizing plant is designed for very fast heating.

Reynolds Consumer Products ordered an Ecomelt PS-140 smelting furnace from Hertwich Engineering for its Hot Springs rolling mill in Arkansas, USA.This furnace type offers greater flexibility in the scrap material it can handle, especially when it comes to oily and coated scrap. The new Hertwich Ecomelt PS-140 replaces two smaller furnaces and supplies two existing casting lines with liquid metal. Due to their proven technology, Hertwich Ecomelt furnaces ensure particularly low energy consumption and material losses.

Hulamin, South Africa, and AMAG of Austria each contracted Hertwich Engineering in 2014 to supply a

PS-250 smelting furnace for aluminum. The Ecomelt smelting furnace and the casting furnace for AMAG will be integrated in the company’s Ranshofen plant. To sum up, the Ecomelt PS-250 is the largest alumi-num smelting furnace with a preheating shaft ever installed by Hertwich. It comes with a capacity of some 76,000 t per year.

Automotive manufacturer Audi successfully commis-sioned two Ecomelt smelting furnaces from Hertwich Engineering. Now the two Ecomelt PR-50 furnaces supply liquid metal to the newly built pressure cast-ing works in Münchsmünster, Germany. Crucial to the decision by Audi in favor of Ecomelt technology from Hertwich Engineering was the company’s in-sistence on high standards in smelting small-sized scrap materials.

TRIMET Aluminium in Essen, Germany, ordered a horizontal continuous caster (HSG) for ingots from Hertwich. This gives the company the capability of producing high-quality alloyed ingots. The annual capacity of the plant is some 60,000 t. The HSG produces ingot formats of approx. 2.0 × 3.5 inches. Therefore, it is 15% more productive than plants for standard ingot formats (2.0 × 3.0 inches).

The melting performance

of the PS-250 for AMAG

totals up to 230 t per day

56



EXTRUSION PRESSES– HMT Hofer Metall Technik, Germany;

25 MN HybrEx® extrusion press– Yasuda Metal Industries, Ltd., Japan;

14 MN HybrEx® extrusion press– Astas Alüminyum San. ve Tic. A. S., Turkey;

14 MN HybrEx® extrusion press– Fabal Alüminyum San. Tic. A. S., Turkey;

32/35 MN extrusion press– ILSIM ALMAX Co., Ltd., Korea;

32/35 MN extrusion press– Altaiseer Aluminium Company, Saudi Arabia;

25/27 MN extrusion press– Helvex S. A. de C. V., Mexico;

12.5 MN extrusion press and horizontal caster

HYDRAULIC PRESSES– Weber Metals, Inc., USA;

hydraulic closed-die forging press– ALCOA, Inc., USA; plate stretcher– CEIEC (Hong Kong) Ltd., China;

billet milling machine 2600

RING AND WHEEL ROLLING MACHINES– Pegasus srl., Italy; RAW 125 (160)– Schmiedetechnik Plettenberg, Germany;

MERW 16-300/90– Forgia del Frignano S. p. A., Italy;

RAW 40 (50)

COPPER PLANTS– Helvex S. A. de C. V., Mexico; horizontal caster

ALUMINUM PLANTS– AMAG Casting, Austria; multi-chamber melting furnace

Ecomelt PS-250 and casting furnace– ALCOA Monterrey, Mexico; compact remelting furnace – HULAMIN, South Africa;

multi-chamber melting furnace Ecomelt PS-250

HYDRAULIC PRESSES– Carpenter Technology Corp., USA;

SMX 1100 forging machine– PJSC Metalurgical Plant Electrostal, Russia;

SMX 600 forging machine including equipment– Guangxi Alnan Aluminium, China;

100 MN plate stretcher

RING AND WHEEL ROLLING MACHINES– OAO EPK Saratov, Russia; RiWa 1600/32– TPCO Bohai, China; RAW 800– UMZ, Russia; RAW 160– OHMI Press Works | Forging Co. Ltd., Japan; RAW 100

CLOSED-DIE FORGING MACHINES– Bharat Forge Aluminiumtechnik, Germany;

MP4000 closed-die forging line and ARWS 2/FNR stretch roller

COPPER PLANTS– Metallo Chimique, Belgium;

anode casting carousel for copper anodes– Amer Group, China; two CONTIROD® lines– National de Cobre, Mexico;

continuous caster and sawing line for copper and copper alloys

– Ningbo Shimao Copper, China; CONTIROD® plant

ALUMINUM PLANTS– EMAL, United Arab Emirates;

two billet homogenizing furnaces including billet handling and ultrasonic testing

– Service Center Metals (SCM), USA; compact-type remelt plant

57

SOLUTIONS FOR HIGHER ENERGY EFFICIENCY

Reconciling economy and ecology is a challenge that we embrace wholeheartedly, and always keep in mind when we develop new solutions. There was a particular focus in 2014 on energy efficiency. Just one approach in this direction is designing innovative hydraulic drives – for instance, MERW electro-hydrostatic compact drives – or speed-controlled pump drives that allow position or pressure regulation of hydraulic cylinders without any other control valves. Furthermore, the SMS group is in-creasingly applying torque engines as drives for presses. Invaluable here is high torque at low rates of revolution. Specially developed on this basis, the MEERtorque drive combines the benefits of minimum pressure contact times during the forming process and a large time window for tool transfer and die maintenance.

The first press with MEERtorque drive has been in pro-duction at SONA BLW Präzisionsschmiede GmbH in Remscheid since 2014. This eccentric forging press is integrated in a fully automated forging line that pro duces precision, ready-to-install transmission components for passenger cars. Included in the benefits are not only longer plant service life, but also higher productivity and reduced emissions as well as energy and resource savings. It should be possible to cut energy by a two-digit percentage.

Location: Remscheid, Germany

ENERGY SAVINGS IN TWO-DIGIT PERCENTAGE RANGE

New on the market for boosting energy efficiency are innovative drive systems such as electrostatic compact drives for ring rolling machines.

Type MT-630 eccentric forging press during commissioning.

58

Annual Report 2014Electrical & Automation Systems

Newly developed software for documentation of slab quality

Up to 25% energy saving due to efficient dust extraction

Joining the Industry 4.0 revolution by linking up individual production components

Plug & Work in 3-D for improved understanding of complex functions and processes

ELECTRICAL & AUTOMATION SYSTEMS

59

In 2014, our Electrical and Automation Systems Division increased order intake against the previous year by more than 10%. Sales remained roughly at the same level. Generally, the market is developing very hesitantly and 2015 looks set to be character-ized, above all, by customers’ reluctance to invest due to overcapacities. We see further market potential in revamps that enable plant owners to manufacture more attractive, more competitive products.

The growing requirements for automation in metal-lurgical and rolling plants represent an opportunity for us to respond with innovative new or improved technologies. That’s because today’s electrical and automation systems installed in metallurgical plants are key to reliable, high-quality production.

MOBILE QUALITY CONTROL OF SLABS

Fresh on the market is our Product Inspector – a piece of software recently developed for the documenta-tion of slab quality. Now, operating personnel can simply use a (touch-optimized) tablet to carry out and save an inspection from any suitable location in the works. We offer Product Inspector as an indepen-dent, low-cost solution, or as an IPQS® (integrated product quality system).

EFFICIENT DUST EXTRACTION

To ensure efficient control of dedusting systems, we developed our Gas Cleaning Assistant. This involves first saving a network model of the dust extractor to the plant control unit. Then an online calculation based on an algorithm determines the opening posi-tions of the exhaust air flaps and the corresponding negative pressure required. Significant here is the description of the piping layout because it allows highly accurate flap positioning within the system. Then variable negative pressure leads to a very high-

energy efficiency. The algorithm reacts flexibly and robustly to the various process requirements and does not require any additional metrology. Initial results show that the Gas Cleaning Assistant makes an energy saving of up to 25% possible.

LAYER THICKNESS CONTROL FOR ROLL COATERS

The SMS-developed layer thickness control system for roll coaters ensures the right layer thickness as well as an even distribution of the paint over the strip width. First, it measures the paint layer thickness by traversing the strip. Then these mea-surement values are applied in a control model and the machine settings adjusted accordingly. That reliably prevents layer thickness deviations caused, for instance, by changes in temperature or paint viscosity, or by roll wear.

EDT ROLLING

A standout feature of our 6-high aluminum cold rolling mills for applications in the automotive in-dustry is their extremely high versatility. They can operate in classic 6-high configuration in reduction mode, or with a raised top backup roll in EDT (elec-tric discharged texturing) mode. However, these different operating modes make special demands of our X-Pact® automation. Additional regulation algorithms, such as force and position adjustment of the extended bending system (EBS) as well as skin-passing degree control are implemented in the automation system.

The automation must control the mill stand for re-duction operation as a 6-high configuration with conventional hydraulic adjustment and for EDT mode as a 5-high (with raised top backup roll) with the EBS acting as a “replacement” for the hydraulic adjustment.

Harald Rackel,


Board SMS group

Heads of DivisionDetlef Ehlert

Bernward Reif

60


Another requirement of a technologically outstand-ing X-Pact® automation system is that it sets the correct skin-passing degree for optimal EDT textur-ing – depending on the material and wear condition of the EDT rolls.

PLUG & WORK IN 3-D

Plug & Work is our proven service that ensures short-er commissioning times and steeper plant run-up curves. And it just got better, because now we embed a professional, interactive 3-D graphic application into our simulation environment to map and visualize production processes. Using this hybrid real-time simulation, we can represent the mechanical equip-ment, drive, and other technology of each customer plant individually and realistically.

Well ahead of delivery and commissioning, we can test and optimize the automation systems in our test center under true-to-life conditions. Furthermore, Plug & Work in 3-D means our experts can train future operating personnel at the original control desks. That makes it much easier to explain and demonstrate complex functions and processes.

INTO THE FUTURE WITH INDUSTRY 4.0

The idea of Industry 4.0 originated with an initiative of the German government and paints a picture of future industrial production in 2025. According to this, linked production processes will self-organize and self-optimize in local and global networks using standardized interfaces. Our X-Pact® automation platform puts us in a perfect position to react dy -namically to current developments relating to Industry 4.0. This is how the plants we supply can become intelligent components in our customers’ manufac-turing networks. Similarly, these developments also affect our own equipment engineering and manu-facturing processes. So we are ourselves actively linking up our individual production components in the sense of Industry 4.0. Today, we already directly transfer the data regarding various production steps between the different engineering and manufacturing tools. Optimizing and adapting these processes, also with reference to Industry 4.0, is part of a policy we permanently follow.

62


MAJOR ORDERS

METALLURGICAL PLANTS AND ENVIRONMENTAL TECHNOLOGY– Big River Steel LLC., USA;

electrical and automation systems for a 150-t electric-arc furnace, a 150-t ladle furnace with two treatment stands, a 150-tRH-TOP plant, a gas recovery plant, and a new CSP® casting machine

– Saudi Iron and Steel Company, Saudi Arabia; electrical and automation systems for the moderniza-tion of the switch system and transformer as well as replaced PLC and mold level control (MLC)

– ArcelorMittal Asturias, Spain; electrical and automation systems for the alteration of a two-strand slab caster

– Tata Steel IJmuiden, Netherlands; electrical and automation systems for the alteration of two BOF converters

– ArcelorMittal Bremen GmbH, Germany; electrical and automation systems for the converter drives and the tapping model for two converters

– Companhia Brasileira de Metalurgia, Brazil; electrical and automation systems for a submerged-arc furnace

– Salzgitter AG, Germany; electrics and automation for alteration of a BOF converter

FLAT ROLLING PLANTS– Big River Steel LLC., USA;

electrical and automation systems for a single-strand CSP® plant, a pickling/tandem mill, and an offline skin-passing mill

– EPS Siderúrgica Nacional (EPSSN), Venezuela; electrical and automation systems for a Steckel heavy plate mill

– Special Metals, USA; drive technology and automation for a coiler in the Steckel rolling mill

– Tianjin Zhongwang Aluminium Co. Ltd., China; electrical and automation systems for a three-stand aluminum tandem mill and a single-stand aluminum cold rolling mill

– PAO Severstal (formerly: OAO Severstal), Russia; electrical and automation systems for the moderniza-tion of a four-stand tandem cold rolling mill

– Aleris Rolled Products Inc., USA; electrical and automation systems for an aluminum cold rolling mill

– JSW Steel Ltd., India; electrical and automation systems for the modernization of a CSP® plant

– Baosteel Zhanjiang Iron & Steel Co., Ltd., China; electrics and automation for a cold plate straightener

– The Tinplate Company of India, India; electrical and automation systems for the moderni-zation of a reversing cold rolling mill

STRIP PROCESSING LINES ANDTHERMAL PROCESS TECHNOLOGY– Big River Steel LLC., USA;

electrical and automation systems for the pickling section of the pickling/tandem line, a continuous hot-dip galvanizing line, and batch annealing

– Tianjin Zhongwang Aluminium Co. Ltd., China; electrical and automation systems for a color coating line

– Wuppermann Hungary Kft., Hungary; electrical and automation systems for a hot strip pickling and hot-dip galvanizing line

63

ELECTRICAL AND AUTO MATION SYSTEMS: MODERNIZATION OF CONVERT ER TILTING DRIVES

ArcelorMittal Bremen awarded us an order to revamp the electric drive technology of two converters. Both con-verters handle a tapping weight of 290 t. Here, we will supply a new drive system for each converter including the drive motors with frequency-controlled rotary current, the control units for automated converter tapping and slag skimming, plus we will take care of inspections of the two tilting gears as part of a service contract.

What ArcelorMittal Bremen gains from us with this future-oriented revamp is harmonization and stabilization of its productivity, regardless of personnel.

This order is already the fourth we have received from ArcelorMittal for upgrading a total of eight converter tilting drives to modern rotating-current technology. Previously, we successfully modernized the converters at the plants in Eisenhüttenstadt, Gent, and Gijon. SMS has already revamped the gas recovery plant at the same ArcelorMittal works in Bremen.

Meanwhile, the type of order we attracted from ArcelorMittal Bremen involving mostly the electrical and automation systems makes up a significant share of the

Location: Europe

MODERNIZATION

overall volume in our Electrical and Automation Systems Division. Usually, these are small to medium-sized mod-ernizations such as replacing obsolete switchgear, drive technology, or automation, or expanding plants.

If these projects are located in Germany and neighboring countries, they are normally assigned to our subsidiary LUX Automation. In all other regions, these orders are carried out either by our main company or the foreign companies in China, India, and the USA.

ArcelorMittal awarded us four orders for revamps of a total of eight converter tilting drives. Here is the location in Gent, Belgium.

64

Annual Report 2014Production

International manufacturing and workshop network

Powerful machine stock for production of important core components

Close links between engineering and production

High quality and solid manufacturing know-how available worldwide

MANUFACTURING EXPERTISE – WORLDWIDE

65

SUCCESS WITH A DUAL STRATEGY

Maintaining its long-term commitment to Germany as an engineering and production location while also driving the international expansion of our activities, the SMS group is ideally positioned to meet the challenges of the global market for metallurgical plants and machinery.

One key component here is our dense manufacturing and workshop network around the world. We will continue to produce the most complex machinery and plant components in our German facilities – at the very top level of technology and with know-how that has grown over decades. Essential to preserving this status is our continuous investment in the expansion and modernization of these production plants.

Simultaneously, we are building up even more in-ternational workshop, service, and production ca-pacities. There is a focus here on special products tailored to the local market that we can manufac-ture there at competitive prices. Our local presence ensures customers and partners benefit from fast, no-fuss service, and also guarantees close coopera-tion. Another benefit is that third-party companies can use our production shops for the assembly of transmission and hydraulic system parts.

It all shows that we are committed to our German production locations, yet we combine this principle with a global approach that ensures we are close to our customers and their markets. This has been a hallmark of our company for more than 140 years. Right back in 1904, our plant in the Siegerland re-gion of Germany built wagons for the coalmines in the Middle Kingdom. China, which today is one of our most important markets, where we operate not only an extensive service network, but also our own production locations.

This also means it’s imperative for us to build close links between engineering and production. Our en-gineers know all there is to know about current and future requirements in the steel, aluminum, and NF

metals industries. As a systems supplier, we cover the entire process chain including electrics, auto-mation, and services.

PRODUCTION LOCATION GERMANY

HilchenbachSiegerland is an old iron region. This is where the origins of the SMS group lie, with the foundation in 1871 of forging company Carl Eberhard Weiss. Who would have thought then that this would lead to the SMS group of global players? Today, the Hilchenbach production plant ranks among the most modern any-where in the world. Here, SMS launched the most ambitious investment program in its corporate history. That involved erecting buildings with a total floor space of more than 10,000 square meters for a new welding and tube production shop, a finishing shop, plus the gear and hydraulic system production shop. Simultaneously, we upgraded our machine stock. Most recently, we built a state-of-the-art dispatch and outgoing goods center, significantly expanding the area available for workshop assembly.

Process optimizationModernization for us means more than just putting up new buildings and halls. It is not enough for a company like ours to engineer and construct high-tech plants – what’s equally crucial is to constantly analyze and optimize our own production routines. That’s why we have systematically designed effi-cient processes in our Hilchenbach plant. Take, for instance, our new manufacturing islands that have significantly cut component lead times. Now we can better synchronize work processes and reduce transport as well as storage periods. Worth noting too is our new turning and milling center for coiler parts. This machine turns, mills, and cuts gears – something that used to require separate work stages.

The result? Processing a mandrel takes place in much fewer steps. And that in turn means a 40% time saving – a real added value because our customers can look forward to shorter delivery times. The plant

Heads of DivisionHeinz Joachim Gietmann

Jens Overberg

Harald Rackel,


Board SMS group

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Annual Report 2014Production

is installed in our mechanical workshop where we can machine unit weights of up to 130 t.

Another key feature is the hydraulic system pro-duction shop. We took state-of-the-art automotive factories as a model for our ultra-efficient produc-tion sequences. Whereas hydraulic components manufacturing used to be spread through several halls, these parts are now produced completely in one workshop. Characteristic of the work routines is a systematic material flow from raw materials through to dispatch as well as bundling of all the required assembly and test activities. That generates not only more efficiency, but also improved quality.

Attaining an even higher level is an extra reason for building the new test field. Here, we can assemble hydraulic control systems, preset them, and test them thoroughly. Ultimately, customers gain from shorter commissioning times.

MönchengladbachIt all started in 1872, when the Meer brothers found-ed an engineering factory in Mönchengladbach. Today, the location benefits more than ever from its favorable situation for heavy-load transports: in the north-south direction, freeway 61, and in the west-east direction freeway 52 are practically on the doorstep. Also nearby is Krefeld, where heavy components are loaded onto barges on the Rhine river, taking them ultimately to customers worldwide. The starting shot was fired in 2010 for the largest modernization in our corporate history of the Mön-chengladbach production shop: the “2020” project.

Included here was construction of a new assembly hall with a floor space of 4,000 square meters and a crane capacity of 180 t, as well as the installa-tion of 15 new machine tools in the area previously occupied by the mechanical workshop.

A central computer-controlled BAZ machining line with fully automated workpiece charging as well as tools for unit weights of up to 10 t, a drilling line for processing cubic workpieces with unit weights of up to 120 t, and a five-axis lathe and milling center with maximum capacities of 60 t workpiece weight and 20 meter workpiece length – these are the key data detailing the new production capacity.

PRODUCTION LOCATION CHINA

Plant ZhangjiagangCustomers can contact our workshop in Zhangjiagang for services for oil film bearings, AGC, HGC, and CVC® cylinders, coiler mandrels, and drive spindles. Furthermore, we have extended our supply range with new machines for mold machining as well as for the production and repair of specially coated rolls (CGL and CAL). Equally attractive to customers is that they can obtain original spare parts and rely on repairs carried out by SMS technicians. The work-shop in Zhangjiagang has some 350 employees; 100 of them work in services. They are responsible for maintenance and repairs.

67

Plant ShanghaiWe established our workshop in Shanghai to ensure local production and assembly of SMS plants and machinery with German know-how.

Deployed on-site in Shanghai are German manufactur-ing specialists as well as qualified staff responsible for supplier management from Germany. The total number of employees there is 300. Ranging over 26,000 square meters, the site lies 5 km to the west of the river Huangpu. Each of the four assembly halls is 15 meters high, and together they offer 17,000 square meters of floor space. Crucial to the smooth operations here are the options of reconditioning parts in the machining hall or quickly procuring new parts from the workshop’s own parts store.

Our experts advise customers locally about everything to do with spare parts, service, and revamps.

PRODUCTION LOCATION INDIA

Plant BhubaneswarSMS India Pvt. Ltd. supplies customers in India and neighboring countries with plants for the steel in-dustry. Included here are submerged-arc furnaces, continuous casting technology, hot flat and cold flat rolling mills, as well as strip processing lines and furnace technology. Also available is a Service Entry Point for automation systems, located in Delhi. Local service engineers answer customers’ techni-cal questions. There is a particular focus on safety, maintenance, and development of electrical plants. Our specialists use remote access to gain fast and secure access to customers’ automation systems. That means they can provide support 24/7. Espe-cially in emergencies, this saves machine owners precious time. Whatever the problem, our experts tackle it with a tailor-made combination of global tele-service and individual, on-site support.

SMS India Pvt. Ltd. operates not only the service and manufacturing workshop in Bhubaneswar, but also has branches in Gurgaon, Pune, and Kolkata. Engineering and design are also in the mix at these locations.

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Annual Report 2014Technical Service

Strong demand for maintenance and repairs

Education and training expanded

Even more all-round services

High quality in replacement part service

TECHNICAL SERVICE

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The SMS group Service Division can look back on a good year in 2014. Compared to 2013, order in-take increased significantly. We are determined to continue on this successful path. To do this, we will, in the future, pool our services even more tightly to offer competitive price and supply strategies.

STRONG DEMAND FOR MAINTENANCE/REPAIRS

Interest in our maintenance/repair service contin-ues to be strong worldwide. Even when buying new plants, customers are increasingly asking about operator schemes for workshops – for instance, roll grinding shops or mold and segment workshops. Not only responsible for the equipment for the major project Big River Steel in Arkansas, USA, we also secured a 10 year service contract to maintain the casting machine, repair core components, and oper-ate the roll workshop. What counts for our customers above all are the high technical standards of our maintenance packages as well as the benefits from our global network of service workshops.

In 2014, SMS opened another service center in Cilegon, Indonesia. This is the base from which we support the steel industry in the southeast Asia re-gion. Now, SMS Service covers all the key customer regions around the world. Particular specialties of our Cilegon workshop are maintenance and repairs of continuous casters, galvanic coating of copper plates for molds, and reconditioning of segment rolls.

Meanwhile, we have identified increasing interest in maintenance and repairs not only for steelworks and rolling mills, but also in other areas of our product range such as reduction furnaces or logistics systems.

As a result of our good cooperation and service ex-pertise, Russian company MMK Magnitogorsk Iron and Steel Works extended the cooperation contract for its continuous caster No. 6 by a further 3 years.

This again boosted inquiries from the Russian market about our maintenance service. TECHNICAL CUSTOMER SERVICES: SPECIALIZED, FLEXIBLE, AND CLOSE TO CUSTOMERS

To be capable of offering services on-site and as flex-ibly as possible, we are continually expanding our sales and service network as well as our workshop capacities worldwide. That ensures specialized ser-vice technicians who speak the customer’s language are always on the spot fast. They are effectively linked to each other and our headquarters, so that we can guarantee sustained and globally uniformhigh quality.

TRAINING REMAINS IN DEMAND

Once again, the number of inquiries about training courses increased significantly in 2014. Included here are courses our experts tailor to the partici-pants’ requirements. Worth noting here from 2014 is a training plan drawn up for a US company. This customer’s staff members came to Mönchengladbach for the course in December 2014.

It consisted of a combination of theory and practical exercises. The focus was on measuring technolo-gy and the new options presented by a revamped cold-pilger rolling and grinding machine. There were also software developers among the trainers, who revealed tips and tricks from their many years of professional experience.

Not only customized courses like these were popular last year, also standard training events attracted a great deal of interest. Here, we offer selected aspects of maintenance and plant technology.



Board SMS group

Heads of DivisionPino Tesè

Johannes Kahlen

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Annual Report 2014Technical Service

ALL-ROUND CONSULTING SERVICES

Apart from training courses, consulting services are also becoming an increasingly important element in our portfolio. It makes sense, for instance, to run feasibility studies examining whether a customer’s suggestions for and requirements of a plant can be realized. Equally useful, a customized maintenance strategy can reduce downtimes and maintenance costs. Convinced by this all-round view, Norwegian agricultural machinery manufacturer Kverneland placed an order with us in 2014. The company signed a long-term service contract with us. Working closely with Kverneland, we devised strategies and methods of keeping its plants constantly operational. To ensure the best results, we regularly analyze the condition of the plants.

REPAIR SERVICE, EQUIPMENT CHECKS, AND MODERNIZA-TIONS

We received many inquiries about replacement parts and repairs, but also revamps, in 2014. Business with repairs grew above all in Europe. Here, order intake reached a record level. Last year, we integrated the repair center as an independent unit in our workshop in Hilchenbach, Germany. Yet repairs are not all, because we have also developed machine-specific equipment checks for early detection of weak points and possible defects to ensure greater efficiency and planning security. One customer that relies on this service to improve its plant availability and prevent unwelcome surprises is Ovako Tube & Ring AB in Hofors, Sweden.

Modernization solutions are particularly in demand in the forging sector. This is illustrated by a contract from MWH Märkisches Werk Halver, Germany, for a general overhaul of a closed-die forging machine bought second-hand. Prior to the purchase, the SMS service experts examined the friction spindle press together with the customer and defined the future

performance specification. Starting from the basis of this thorough check-up, we revamped the plant in our Mönchengladbach workshop.

QUALITY IN SPARE PARTS SERVICE

Again in 2014, the market for spare parts remained difficult, partly because our customers’ plants were not fully utilized. More than ever, tightened budgets determined price negotiations. Nevertheless, the expansion of our sales activities for spare parts and service successfully generated some business. We have transferred our focus to marketing innovative components for boosting plant performance.

FULL CAPACITY UTILIZATION IN COPPER MOLD PLATES

The order situation in 2014 for CSP® copper plates was good. The “copper plate station” in our Hilchenbach workshop operated at full capacity. Nucor Steel Arkansas, USA, and Ternium, Mexico, placed orders worth millions. We also achieved initial successes on the Chinese market. Included here was the decision by MaSteel to equip its CSP® machines with SMS mold plates. Ceramic-coated mold plates (UniGuard®) are becoming increasingly well established in Europe. The first trials will take place starting in mid-May 2015 in Aviles, Spain, and in Katowice, Poland. Meanwhile, we have completed development of a new type of CSP® copper plate (ICC-Mold) that offers improved cooling and simpler manufacturing characteristics. Ternium in Mexico already uses these plates.

We expanded our sales activities for oil film bearings to cover new plants, modernizations, and replacement parts. Particularly worth mentioning are the major orders for heavy plate and Steckel rolling mills from SN in Venezuela and Ostrava in Portugal, the CSP® plant at Big River Steel, USA, and the modernized hot rolling mill at ArcelorMittal in Gent, Belgium.

Early detection

of weak points

provides planning

security

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MODEL GENERAL OVERHAUL

Applying the expertise of the original equipment manufacturer, SMS thoroughly overhauled a Ha-senclever horizontal forging machine at VAN BEEST in Sliedrecht. The Dutch company ranks among the global leaders in manufacturing shackles and fit-tings for chain and wire rope suspension gear. These products are used on offshore oil and gas rigs, in ports, in marine technology, and in conveying ap-plications. Dating from 1978, the horizontal forging machine VAN BEEST uses to manufacture shackles had started to produce a high rate of rejects due to worn machine parts.

The SMS experts performed an equipment check to identify heavily worn and critical components, then developed an extensive plan for the general overhaul of the horizontal forging machine. An important issue was the availability of special parts from the Hasen-

clever WSHK 800 series. That’s because, apart from the wear parts in stock in the components store, other parts were required that needed a longer procurement time. We manufactured some of them directly to size, and some as blanks with allowances of five to ten millimeters for subsequent precise adjustment to the machine during the overhaul. This procedure requires know-how about all the details of a plant.

Now, after the revamp, the quality of the shackles is higher, and the reject rate has dropped to almost zero. Today, the old forging machine operates at the same level as a new plant. Simultaneously, the general overhaul is a model for the transformation of an old forging machine into a high-performance, future-proof plant.

72

Annual Report 2014elexis

Basic and key technologies from one source

Diversification balances out cyclical demand fluctuations

Stronger technology leadership in non-metals industry

Range of quality assurance systems expanded

ELEXIS AG

73

The elexis AG business model rests on four pillars: technology leadership, market leadership, diver-sification, and cost leadership. The result of this long-term corporate strategy? Sustained profitable growth. Only a profitable company can also be a socially responsible employer.

TECHNOLOGY LEADERSHIP

Basic and key technology from one source – securing a competitive edgeThe elexis group mission is to develop modern holis-tic solutions that continuously optimize the manu-facturing processes of its international customers in all respects, significantly increase production quality and efficiency, and cut costs. Ultimately, this offers customers palpable benefits.

And the elexis companies are well placed to do so with an innovative portfolio of basic and key technologies, for instance control technology (strip position and register controllers), quality-assurance systems, drive technology, and handling automation for injection molding processes.

This broad product range responds to the demand for increasing automation in industrial production.

MARKET LEADERSHIP

Global market leader due to technology leadershipTechnology leadership and excellent knowledge of the market place the elexis group in an ideal position to recognize gaps in the market, identify customer needs, and offer suitable solutions. Here, elexis concentrates deliberately on niche markets, where it maintains a high presence. Today, more than 34% of elexis group employees work abroad.

That means they are on the ground for customers as expert consultants to answer all questions relating

to sales and service. Furthermore, elexis cooperates exclusively with a large number of trade agencies. elexis group manufacturing facilities serve local markets in Brazil, China, Japan, India, and the USA.

The emphasis on closeness to customers is also underlined by a high participation in trade shows at home and abroad. Just like every year, the elexis group companies will again exhibit at many trade shows in 2014.

Market leadership further expanded through acquisitionMost recently, the elexis group took over eltromat GmbH in Leopoldshöhe, Germany, (now: BST eltro-mat International Leopoldshöhe GmbH) with effect from July 1, 2014. This represents an important step toward expanding its market and technology lea-dership in the nonferrous metals industry. Register controllers complete the product range relating to packaging printing. Equally significant is the fact that the product portfolio of quality assurance systems is constantly being expanded and improved with eltromat products.

DIVERSIFICATION

Industry diversification counters economic fluctuationsDiversification is a firm component of the elexis group business model. This is expressed, on the one hand, by a broad technology and product range, and on the other hand, by customers from a large number of differ ent industries. There is a smart strategy be-hind this approach, because it creates a balancing structure that protects the company from market fluctuation.

The elexis group activities focus on the following markets: steel, packaging, converting, nonwoven fabrics, tires, films, batteries, raw materials, medi-cine, automotive, and consumer goods.

Eckhard Schulte,

CFO SMS group

Managing Board ElexisSiegfried Koepp

Edgar M. Schäfer

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Annual Report 2014elexis

COST LEADERSHIP

Firmly anchored in the elexis group business model alongside the strategic pillars of technology leader-ship, market leadership, and diversification is the aim of cost leadership. All activities are geared to one goal: permanently securing profitability and always maintaining sufficient liquid assets.

ECONOMIC CLIMATE BAROMETER

2014: A year of challengesLooking at the development of the year 2014 as a whole, the markets offered no sustained stability for the elexis group. Political crises such as the continuing Ukraine-Russia conflict or the fighting in the Middle East and Africa had a dampening effect on the global economic climate. Simultaneously, the upswing in the emerging economies, which helped lift the global economy out of the last recession in 2009/2010, dipped.

2015: Opportunities and risks in German machine and plant productionMost recently, the weak economy and collapse of sales in Russia dampened expectations. On the other hand, after the stagnation of 2014, experts anticipate that German mechanical engineering will grow mod-erately again in 2015. There is a demand in Europe, the most important market, for the modernization of infrastructure, among other things. Analysts also expect demand in the USA and threshold countries to increase, contributing to a stable profit situation in the industry.

However, according to economists, the situation remains fragile especially in Europe. They point out that the EU national debt crisis may flare up again. The industry association VDMA forecasts an in crease in production of machines and plants in Germany by 2% in 2015, after adjustment for inflation.

NEW OPPORTUNITIES PRE-SENTED BY “INDUSTRY 4.0”

Fresh opportunities are arising from the further development of technological standards in indus-trial production. Innovative sensor technology plus increasing automation and connectivity will open up scope for new business models and productivity growth. This will be a key issue for mechanical engi-neering, and is expressed by the term “Industry 4.0.”

LONG-TERM OPPORTUNITIES FROM DIVERSIFICATION

Summing up, it is safe to say that the diversification of the elexis group across various business fields offers excellent long-term opportunities. That’s because elexis addresses not only classic basic human needs such as health, prosperity, and safe-ty, but also megatrends that represent sustained, global demand structures. Furthermore, elexis AG concentrates exclusively on industrial production, which is set to experience a new lease of life from the “Industry 4.0” revolution. The focus here is on automation and new sensor types – core compe-tencies of the elexis group.

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Annual Report 2014SMS Elotherm

Vigorous demand for equipment for induction hardening of crankshafts

Combination of induction heating and conventional furnaces offers many advantages

Inductive strip heating cost-effective even at partial load

Convincing performance in heating aluminum extrusion billets

SMS ELOTHERM – INDUCTION TECHNOLOGY

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Once again, SMS Elotherm booked stable sales on a high level in 2014. It is particularly due to the pooling of know-how within the SMS group that plant owners profit from solutions with integrated induction heating from one source. In the area of heating technology for extrusion plants, order in-take overtook that for the previous year, whereas hardening and induction heating plants were on target, but slightly below the previous year’s figures.

INDUCTION HARDENING PLANTS FOR THE AUTOMO-TIVE INDUSTRY

Highlights in 2014 were, above all, the successful commissioning projects of crankshaft hardening machines at General Motors International, BMW, and Volkswagen, China.

For example, at the General Motors plants in China, Mexico, and the USA, five EloCrank™ crankshaft hardening machines along with the associated lab equipment were installed and commissioned.

Based on a framework contract signed with Elotherm in 2012, General Motors has ordered more new plants and is continuing its strategy of adapting all its facilities worldwide to induction hardening of crankshafts. This is simultaneously a shift to smaller yet very high-performance engines designed to save even more fuel and emissions thanks to the inductively hardened crankshafts.

INTEGRATED INDUCTION TECHNOLOGY IN THE GROUP

Today, induction technology has evolved into an integral part of many plant designs in the various divisions of the SMS group. Which type of heating is the most efficient solution always depends on the specific application. It may be an exclusively inductive type of heating such as that for the CMT™ minimill for TungHo Steel in Taiwan. Conversely, the best option for the revamp of the CSP® plant at Nucor Steel Berkeley in the USA was inductive reheating to equalize and raise the temperature after a conventional furnace.

Especially for this kind of inductive reheating before rolling processes to achieve optimal rolling temper-ature, induction technology offers decisive advan-tages. They include individual, fast achievement of the optimal rolling temperature despite variable entry temperatures, zero energy consumption during auxiliary times and plant idle times, increased me-tallic yield due to low-scale heating, and no direct CO2 and NOx emissions.

Also evident in the classic tube and pipe plants area is the fact that successful cooperation within the SMS group was once again demonstrated in 2014. CSI Tubular Products in the USA successfully com-missioned a 24-inch high-frequency pipe welding line from SMS Meer.

Managing BoardJohann Rinnhofer

Martin Schultheis

78

Annual Report 2014SMS Elotherm


INDUCTION HARDENING PLANTS– General Motors, USA, Mexico, China;

four EloCrank™ plants for hardening crankshafts– Daimler AG, Germany;

four EloFlex™ for hardening axle parts– Niles Simmons for BMW, China;

two EloCrank™ plants for hardening crankshafts

INDUCTION HEATING PLANTS– ThyssenKrupp, Germany;

EloForge™ plant for reheating crankshaft blanks– TungHo Steel, Taiwan;

EloHeat™ for reheating slabs and profiles– Wuppermann, Hungary;

MetalLine™ (zinc pot, strip heating plant)– BGH Edelstahl, Germany;

ExtruLine™ for heating steel blocks

INDUCTION TEMPERING PLANTS– Gerdau, Brazil;

TemperLine™ for tempering bar steel

INDUCTION HARDENING PLANTS– General Motors, USA, Mexico, China;

five EloCrank™ plants for hardening crankshafts– Volkswagen, China;

two EloCrank™ plants for hardening crankshafts– ZF Lenksysteme, Germany, China;

two EloShaft™ plants for hardening steering rods

INDUCTION HEATING PLANTS– ThyssenKrupp, USA;

EloForge™ plant for reheating crankshaft blanks– Ovako, Sweden;

EloTube™ for heating mother tubes– Aluminium Laufen AG, Switzerland;

ExtruLine™ for heating aluminum blocks

INDUCTION TEMPERING PLANTS– Tubos Reunidos, Spain;

TemperLine™ for tempering pipes

SMS Elotherm supplied the inductive HF welding and seam annealing technology. The EloWeld™ 1800 pipe welding machine is integrated in the central section of the pipe mill, where it ensures reliable welding of the longitudinal seams. The downstream EloSeam™ 3000 pipe seam annealing plant takes care of post-annealing the welded seams to nor-malize the microstructure.

IAS, acquired by SMS Elotherm in 2013, is already well integrated in the SMS group. This is illustra-ted by an order received at the end of June 2014

from the Wuppermann group. It contracted SMS to supply a hot wide strip pickling and hot-dip galva-nizing line for its new plant in Győr, Hungary. SMS Elotherm will supply the induction furnace, which will operate cost-effectively even at partial load. Featuring two zinc pots from IAS, each equipped with a special refractory lining for zinc-magnesium coatings, the line offers a high degree of flexibility when it comes to coatings.

79

PERFORMANCE SPEAKS FOR ITSELF

Ilsim Almax of South Korea ordered a TEM-PRO Heater® plant from IAS. That’s what the company has chosen to use to heat aluminum extrusion billets for the production of thin-walled heat exchanger tubes.

As the name indicates, the TEM-PRO Heater® is a temperature-profile heating system. It ensures precise temperature control during extrusion pressing, there-fore guaranteeing a perfect manufacturing process with isothermal extrusion presses.

Compared to a gas furnace, the TEM-PRO Heater® comes with a much higher power density, making it far more effective especially for large block diameters.

The multilayer coil design and infinitely variable power regulation using transistors ensure low energy con-sumption. Equally important is that the system does not overheat the block surfaces.

Due to the standardized connection to plants for isother-mal extrusion pressing, the TEM-PRO Heater® achieves up to 15% higher productivity than comparable plants.

Commissioning is scheduled for early 2015.

[1] | Multi-zone induction furnace (TEM-PRO Heater®) with sheet transport. [2] | Block charging into an extrusion press.

IAS TEM-PRO Heater® integrated in manufacturing line for aluminum long products.

[1] [2]

Location: Hwasung-City, South Korea

HEATING ALUMINUM EXTRUSION BILLETS

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Annual Report 2014Employees

Further formulation of internationally binding leadership principles

Intensification of project management training courses worldwide

Expansion of structured knowledge transfer

Consistent high quality of vocational training

EMPLOYEES

81

Both the past business years of 2014 and 2015 are characterized by a declining order intake and as-sociated global adjustments in the organizational structures of the SMS group.

Considering this background, we took extensive ac-tion to increase efficiency and cut costs, especially materials, manufacturing, and administration costs, as well as personnel costs. Integral to our corporate progress and promotion of global cooperation is the new market presentation of our group as a plant and machinery constructor for the entire metallurgical process chain under the SMS group umbrella brand.

This gradual development decisively affected the work of our globally operating Human Resources department. The focus here is on reorganization to-ward leaner, more efficient structures. All nec essary personnel adjustments will be made as socially re-sponsibly as possible and with the goal of securing the maximum degree of expertise. Older employees will systematically transfer their experience and know-how to younger colleagues during a struc-tured process before they retire. The average time employees stay with our company group is 17 years.

NUMBER OF EMPLOYEES

The annual average number of employees in the SMS group worldwide, including apprentices, increased by 147 to 14,003 (2013: 13,856).

The figure for Business Area SMS Siemag decreas-ed compared to the previous year by 17, with an average over the year 2014 of 9,133 (2013: 9,150). That included 1,553 (2013: 1,648) employees of Paul Wurth. Contributing to these figures was an increased recruitment of employees in our foreign service companies as part of a strategic expansion of our service business. In total, 4,315 employees were on our payroll in Germany and 4,818 abroad. In Business Area SMS Meer, the average number of employees in 2014 was 3,716 (2013: 3,647).

Here again, the hiring of new staff for the strategi-cally important service area was mainly responsible. In total, 2,309 employees were on our payroll in Germany and 1,407 abroad.

In the elexis group, the number of employees in 2014 increased to 1,098 (2013: 1,005), primarily as a result of the initial consolidation of BST eltromat International Leopoldshöhe GmbH.

HR AND ORGANIZATION DEVELOPMENT

Cornerstones of the past business year were:

Management – Further development of internationally binding lead-

ership principles within the SMS group Human resources cost reductions 2014/2015– Provision of tools, support and coaching of managers

and employees– To help departments and leaders handle strategic

human resources planning

International human resources– Launch event for the SAP implementation project

in India with Indian and German colleagues in IT– Intercultural Workshop for Esmech, Mumbai, India,

to improve cooperation in joint customer projects

Training courses– Various steps to improve customer contacts, e.g.,

rhetorical and presentation training, behavioral coaching, and support with customer analysis

Project management – Further expansion of project management training

courses worldwide– Discussions about and plans for joint project

management structures in the SMS group– Including anchoring globally uniform procedures in

project management and joint training of experts

Torsten Heising,


Board SMS group

„We took extensive action to increase efficiency and cut costs.“

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Annual Report 2014Employees

TALENT AND KNOWLEDGE MANAGEMENT

Only with well-trained, highly qualified employees can our company achieve sustained success in the competitive environment. The constant development of technological products and services driven by changing customer requirements as well as the restructuring of procedures and processes require ongoing training of our employees to qualify them for new challenges.

Well aware of these factors, we implemented an internal training course program in 2014 totaling 1,114 seminars for 7,718 participants. That includ-ed not only recurring, standardized courses, but also tailored training events dedicated to improving teamwork in the divisions and units within the group. Added to this were more than 500 participants with specific job requirements who completed training sessions at external providers.

Next in our list of successes is the “SMS Akademie,” which offers a broad self-improvement program employees can voluntarily attend in their free time. It covers technical and intercultural topics as well as personal development and sports activities in groups. As in the previous year, the SMS Akademie held 257 events with 3,204 participants in 2014. This shows once again how committed our employees are to using educational opportunities even in their leisure time, so that they can improve themselves and build personal networks.

There is continued healthy demand for innovative types of learning with modern media under our webucation program: web-based training, video tutorials, cyber-teachers, phone-based training, and audio books make it easy for employees to learn online at their own pace and at the times that suit them. The entire SMS Siemag range comprises just under 70 different topics, which have been tackled by 954 participants. Furthermore, almost 500 internally created podcasts have been viewed.

Particularly important is our WERT program. It is designed to support a structured knowledge transfer process and has been in operation since the end of 2010. There is one element named “Senior” that

Support and

on-the-job training

program expanded

helps ensure expertise is passed on by employees approaching retirement to their successors. And the “Professional” component that organizes know-how transfers, for instance to spread the know-how of individuals to other colleagues. Further WERT programs are in the pipeline before the scheduled retirement of long-standing employees. This will secure these people’s knowledge and experience for the following generation in the company.

Also on the subject of knowledge management, our support program for up-and-coming young engineers has proved an important part of on-the-job training for new recruits. The idea is to help young employees with little experience find their feet in their world of work. To do this, we partner them with experi-enced mentors who familiarize the newbies with the structures and procedures in the SMS group. On average, the participants take part in the scheme over six months.

Another success story is the SMS TECademy foun-ded in April 2011. It offers training packages to steel producers and rolling mill owners designed to teach them quality criteria, operating know-how, flexibil ity, and practical utilization of plants and machinery. The program is already well established. The number of training courses and participants has increased every year.

IDEAS MANAGEMENTIMPULSE

The IMPULSE ideas management scheme registered 2,136 improvement suggestions from employees in 2014. Their implementation saved a total of EUR 2,171,000. That was well worth the prize-money paid out, which added up to EUR 563,000.

VOCATIONAL TRAINING

It is clear to us that securing qualified talents to cover our need for specialist employees is a key success factor for the future. In 2014, the average number of apprentices was 339 (2013: 321), with a peak of 399. The apprenticeship quota in Germany is around 6%.

83

The quality of our professional training is proven by the high examination performance of our appren-tices. Once again in 2014, their results were higher than the average for the Chambers of Commerce in Germany. One of our apprentices even achieved the best grade in the state of North Rhine-Westphalia. Another seven of our young talents were the best in their subjects in their respective Chamber of Commerce examination districts.

As in previous years, in 2014 our apprentices at the Düsseldorf and Hilchenbach locations successfully entered the Federal German Foreign Languages Competition with video contributions. Competing in a field of 135 teams, one of our two teams made it through to the final at the University of Amberg-Weiden.

We also take very seriously our commitment to pro-moting academic talent, especially when it comes to engineers in mechanical engineering, electrical engineering, and metallurgy. Key here is making contact with students at an early stage. We offer a whole raft of instruments to support students, includ-

ing our own scholarship program, work-and-study program, internships in Germany and abroad, and assistance with Bachelor and Master dissertations.

Getting the very young interested in technology is our contribution to ensuring there are enough suit-able job applicants for our company in the future. That’s why we go directly into schools, participating in cooperation schemes and other projects. And the same commitment is also reflected in our commu-nication via social media. For instance, users can click on our YouTube channel to find out about our fields of operation as well as the training opportu-nities we offer.

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Annual Report 2014Financial Statements 2014

BALANCE SHEET(IN THOUSANDS OF EUR)

ASSETS Dec. 31, 2014 Dec. 31, 2013

Intangible assets 436,700 499,135Property, plant, and equipment 707,011 666,855Investments in unconsolidated, affiliated companies 21,932 30,885Investments in companies accounted by equity method 58,026 60,236Other equity investments 30,101 3,853

Investment securities 80,604 68,147Deferred tax assets 102,221 71,047Other non-current assets 7,481 11,405

Noncurrent assets 1,444,076 1,411,563

Inventories 923,315 938,843Trade receivables 858,828 814,247Receivables from income taxes 57,682 50,632Other current assets 150,859 137,314Securities 701,170 798,251Cash and cash equivalents 931,645 1,157,787

Current assets 3,623,499 3,897,074

Total assets 5,067,575 5,308,637

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2014

85

LIABILITIES Dec. 31, 2014 Dec. 31, 2013

Subscribed capital 10,000 10,000Capital reserve 109,125 109,125Profit reserves 596,732 678,357Income and expenses included directly in the equity capital 119,997 83,304

Equity capital of the shareholders of SMS Holding GmbH 835,854 880,786

Non-controlling interests 134,361 141,714

Shareholders’ equity 970,215 1,022,500

Long-term financial liabilities 33,063 25,154Provisions for pensions and similar obligations 744,376 675,034Deferred tax liabilities 209,941 283,214Other non-current provisions 41,908 30,162Other non-current liabilities 12,203 3,450

Noncurrent liabilities and provisions 1,041,491 1,017,014

Current financial liabilities 107,574 170,911Trade payables 387,677 369,903Liabilities from income taxes 50,417 84,391

Advance payments received 841,985 1,058,816Other current accruals 1,397,792 1,338,393Other current liabilities 270,424 246,709

Current liabilities and provisions 3,055,869 3,269,123

Total liabilities 5,067,575 5,308,637

86

Annual Report 2014Financial Statements 2014

INCOME STATEMENT (IN THOUSANDS OF EUR)

2014 2013

Revenue 3,405,966 3,495,278

Cost of sales –2,753,069 –2,693,778

Gross profit 652,897 801,500

Selling costs –312,001 –318,146General administrative costs –146,794 –155,617Other operating income 20,498 11,853Other operating expenses –223,808 –196,443

Result from investments accounted by equity method 2,045 2,644Net interest income –2,697 –646

Earnings before interest and taxes from income and earnings (EBIT) –9,860 145,145

Financial results 40,615 33,298

Earnings before taxes from income and earnings (EBT) 30,755 178,443

Income taxes –12,122 –52,393

Net profit for the year 18,633 126,050

Of which attributable to:Shares of the shareholders of SMS Holding GmbH 17,962 122,966Non-controlling interests 671 3,084

87

SUPERVISORY BOARD ANDMANAGING BOARDSMS HOLDING GMBH

SUPERVISORY BOARD

DR.-ING. E. H. HEINRICH WEISS, Meerbusch,Chairman

DETLEF WETZEL, Kreuztal,1st Chairman of the Metalworkers’ UnionFrankfurt, Vice Chairman

FRANK-GÜNTER BENNER, Hilchenbach, Executive Vice President,Flat Rolling Plants, SMS Siemag Aktiengesellschaft

DR. RER. POL. MANFRED BISCHOFF, Starnberg,Chairman of the Supervisory Board,Daimler Aktiengesellschaft

EDWIN EICHLER, Weggis (Switzerland),Management Consultant M&B Consulting

JOHANNES FRAUENDÖRFER, Frankfurt/Main,Managing Director, ratiolab GmbH

DR. DAGMAR HEMMERICH, Düsseldorf

HARALD HERMANNS, Niederkrüchten,Industrial Clerk SMS Meer GmbH

STEPHAN KLENZMANN, Siegen,Master of Industry, SMS Siemag Aktiengesellschaft

DR. HUBERT LIENHARD, Heidenheim,Chairman of the Managing Board, Voith GmbH

PETRA LUX, Hilchenbach,Manager Procurement,SMS Siemag Aktiengesellschaft

MIKE SCHÜRG, Cologne,Department of Fundamental Issues and Social Politics, Head of Department of Fundamental Issues Metalworkers’ Union, Frankfurt

MANAGEMENT

BURKHARD DAHMEN, Neuss,Spokesman (since April 4, 2014)

ECKHARD SCHULTE, Hilchenbach

DR.-ING. JOACHIM SCHÖNBECK, Krefeld,Spokesman (up to March 31, 2014)

Annual Report 2014Notes

88

ADDRESSES,PRODUCTS, AND SERVICES

SMS GROUP GMBH

Eduard-Schloemann-Strasse 440237 Düsseldorf, Germany Phone: +49 211 881-0Fax: +49 211 881-4902

Ohlerkirchweg 6641069 Mönchengladbach, Germany Phone: +49 2161 350-0Fax: +49 2161 350-1667

Wiesenstrasse 3057271 Hilchenbach-Dahlbruch, GermanyPhone: +49 2733 29-0Fax: +49 2733 29-2852

[email protected]

Machines, plants, and systems for producing and processing steel and nonferrous metals: submerged-arc furnaces (SAF), basic oxygen steelmaking plants (BOF, AOD), components and systems for dedusting electric furnaces and steel mills, electric steel furnaces (AC, DC), secondary metallurgy plants and processes, continuous casters for slabs and long products, combined continuous casting and hot rolling plants for the production of flat products (CSP®), minimills for long products, hot flat rolling and cold rolling mills, tandem trains coupled with pickling lines, finishing lines, powder coating lines, strip-processing and coating lines for steel and nonferrous metals (surface treatment and refining), drive systems, oil film bearings, electrical, automa-tion, and control systems, hydraulic systems, oil lubricating and cooling systems, rolling oils and emulsions, water supply plants, seamless pipe plants, pipe welding plants, finishing plants and machines, milling and sawing machines for alumi-num, long product and semifinished goods rolling mills, wire rolling mills, hydraulic presses, extrusion presses, closed-die forging plants, ring and wheel rolling plants, transport and handling, warehouse technology, packaging, grinding plants, service.

89

PAUL WURTH S.A.

32, rue d’Alsace1122 Luxembourg, LuxembourgPhone: +352 4970-1 Fax: +352 [email protected]

Complete solutions for pig iron production, coking plants, sinter plants, blast furnaces, direct reduc-tion and recycling plants, energy and environment technology, engineering, service

HERTWICH ENGINEERING GMBH

Weinbergerstrasse 65280 Braunau, AustriaPhone: +43 7722 806-0Fax: +43 7722 806-122 [email protected] www.hertwich.com

Aluminum plants

SMS CONCAST AG

Toedistrasse 98027 Zurich, Switzerland Phone: +41 1 204-6511Fax: +41 1 202-8122

Steel works and continuous casting technology for long products

SMS INNSE S.P.A.

Via Milano, 420097 San Donato Milanese (MI), ItalyPhone: +39 02 2124-1Fax: +39 02 [email protected]

The entire range of metallurgical plant and rolling mill technology without long products

SMS USA LLC

100 Sandusky StreetPittsburgh, PA 15212-5852, USAPhone: +1 412 231-1200Fax: +1 412 231-3995 [email protected]

The entire range of metallurgical plant and rolling mill technology

90

Annual Report 2014Notes

SMS TECHNICAL SERVICES LLC

210 West Kensinger Drive, Suite 300 Cranberry Township, PA 16066-3435, USA Phone: +1 724 553 3420Fax: +1 724 741 0612 [email protected] www.sms-technicalservices.us

Technical services

SMS INDIA PVT. LTD.

286, Udyog Vihar, Phase IIGurgaon 122 016, Haryana, India Phone: +91 124 435 1500Fax: +91 124 435 [email protected]


SMS SIEMAG TECHNOLOGY (BEIJING) CO., LTD.

18th Floor, Juanshitiandi Tower A, Jia No. 50–1, Wangjing XiluChaoyang District, Beijing 100102, China Phone: +86 10 5907 7100Fax: +86 10 5907 7140 [email protected]


METIX (PTY) LTD.

Head Office, Block A, 1st Floor, 204 Rivonia RoadMorningside, Sandton, Gauteng, South AfricaPhone: +27 11 676-2300Fax: +27 11 [email protected]

Reduction metallurgy

SMS GROUP K.K.

Sapia Tower 25F1-7-12 Marunouchi, Tokyo 100-0005, Japan Phone: +81 3 5293 0201Fax: +81 3 5293 0202 [email protected] www.sms-meer.jp

SMS GULF FZE

Dubai Airport Free ZoneBuilding 4E, Block A, Office G16P.O. Box 54795 Dubai, UAEPhone: +971 4204-5010Fax: +971 [email protected] www.sms-gulf.ae

SMS SAUDI ARABIA LLC.

Taba Center, 1st Floor Suite 4Prince Sultan RoadP.O. Box 4822 Al Khobar 31952, Saudi ArabiaPhone: +966 3 887 5830Fax: +966 3 887 5831 [email protected] www.sms-gulf.ae

ELEXIS AG/ EMG AUTOMATION GMBH

Industriestrasse 1 57482 Wenden, Germany Phone: +49 2762 612-0Fax: +49 2762 612-237 [email protected] www.emg-automation.com

91

EMG WERK ELTMA

Am Pfefferbach 2039387 Oschersleben, GermanyPhone: +49 3949 928-500Fax: +49 3949 928-513 [email protected] www.emg-automation.com

Strip guiding and quality assurance systems for metals and drive technology

BST INTERNATIONAL GMBH

Heidsieker Heide 5333507 Bielefeld, GermanyPhone: +49 5206 999-0Fax: +49 5206 999-999 [email protected] www.bst-international.com

Web guiding and quality assurance systems for paper, packaging printing, film, and rubber

HEKUMA GMBH

Freisinger Strasse 3 b (Werk 1), Dieselstrasse 24 (Werk 2)85386 Eching, Germany Phone: +49 8165 633-0Fax: +49 8165 [email protected] www.hekuma.com

Handling systems for injection molding parts

SMS ELOTHERM GMBH

In der Fleute 2 42897 Remscheid, GermanyPhone: +49 2191 891-0Fax: +49 2191 891-229 [email protected] www.sms-elotherm.com

Induction technology, hardening plants, tempering plants

FIGURESof the SMS group

Order intake by Business Areas in million EUR1)

2005 200720060

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2013 201420112010 2012

Figures in accordance with International Financial Reporting Standards (IFRS)1) Including Other/Consolidation.2) Year average with apprentices/other.3) Due to the initial consolidation time of December 2012, the annual average

of Paul Wurth is only one twelfth of the overall value for the year.

SMS group in million EUR1) 2008 2009 2010 2011 2012 2013 2014

Total order intake 5,288 2,341 2,931 3,423 2,835 3,309 3,167


of which Paul Wurth – – – – – 336 359

of which Business Area SMS Meer 1,415 861 1,039 1,365 1,152 1,104 1,050

of which elexis – – – 67 180 181 175

Sales 3,601 3,891 3,036 3,070 3,237 3,495 3,406

Order backlog 6,332 4,641 4,460 4,862 5,377 4,997 4,613

Employees2) 8,369 9,001 9,209 10,477 11,822 13,856 14,003


of which Paul Wurth – – – – 128 1,648 1,553

of which Business Area SMS Meer 2,008 2,572 2,599 3,205 3,431 3,647 3,716

of which elexis – – – 390 967 1,005 1,098

3)

2,83

5 3,30

9

5,14

2

5,28

8

2,34

1

2,93

1 3,42

3

3,23

5

3,16

7

SMS Siemag SMS Meer elexis Plastic TechnologyPaul Wurth

2,81

1

SMS

grou

p • A

nnua

l Rep

ort 2

014

Annual Report 2014

SMS groupCorporate Communications

Eduard-Schloemann-Strasse 4 • 40237 Düsseldorf • GermanyPhone +49 211 881-4127 • Fax +49 211 881-4386

[email protected]

Internet: www.sms-group.com

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