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Outokumpu

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This article is about the company. For the Finnish city, see Outokumpu, Finland.
Outokumpu Oyj
Company typeListed company
Nasdaq Helsinki: OUT1V
IndustryStainless steel
Founded1932
HeadquartersHelsinki, Finland
Key people
Jorma Ollila (Chairman), Roeland Baan (President and CEO)
ProductsStainless steel
Revenue€6.844 billion (2014)[1]
Decrease (€88 million) (2014)[1]
Decrease (€439 million) (2014)[1]
Total assets€6.411 billion (end 2014)[1]
Total equity€2.132 billion (end 2014)[1]
Number of employees
11,500 (June 30, 2015)[1]
Websitehttp://outokumpu.com

Outokumpu is a group of companies headquartered in Helsinki, Finland, producing stainless steel, employing about 11,500 employees in more than 30 countries.[2] Outokumpu has a long history as a mining company, and still mines chromium ore in Keminmaa for use as ferrochrome in stainless steel.

Company history

In 1908, a large deposit of copper ore was discovered in Outokumpu, in Northern Karelia. Outokumpu (OTK) was established to develop the now-exhausted mine. In the 1940s, OTK developed the flash smelting process for smelting copper.

From 1986 to 1988 Outokumpu participated in a stainless steel cartel; it was caught in 1990, but not fined.[3] From 1988 to 2001 Outokumpu and the Swedish company Boliden participated in a cartel for copper tubing in the European market.[4]

In 2001 Avesta Sheffield -which was formed from a 1991 merger of British Steel Stainless with the Swedish firm Avesta (as in Avesta Municipality)- merged with Outokumpu, forming the third-largest stainless steel producing company in the world at the time. The new company named AvestaPolarit, headquartered in Stockholm, was jointly owned by Outokumpu and the Corus Group of Swedish institutional investors. In September 2001, Outokumpu's plant construction branch Outokumpu Technology bought the German Lurgi Metallurgie in Frankfurt.

In December 2003 and September 2004, the EC fined Outokumpu €36,14 million for its copper tubing cartel activity.[4] In 2004, Outokumpu bought the shares owned by Corus, so AvestaPolarit became a wholly owned subsidiary of the Outokumpu Group, delisted from the Helsinki and Stockholm stock exchanges, and only Outokumpu remained, headquartered in Espoo.

In 2005, Outokumpu sold its copper branch, Outokumpu Copper, except for the copper tube and brass division, which as of 2014, is known as Luvata International,[5] and OTK's zinc branch merged with the Swedish company Boliden. At the same time Outokumpu sold all Boliden shares. In June 2006, Outokumpu Technology was spun off as a separate, renamed Outotec in April 2007.

On 31 March 2008, the cold rolling mill in Sheffield was closed in a company-wide 10% fixed cost reduction plan. The melt shop in Sheffield continues producing material for long products. In April 2008 OTK exited the copper business by selling its remaining copper tube and brass division to Cupori Group Oy.[6]

On 31 January 2012, Outokumpu announced it would buy Inoxum, the stainless steel division of German ThyssenKrupp, for 2.7 billion euros. In November 2012, the European Commission found this acquisition would have created an EU market dominance for cold-rolled stainless steel flat products with Outokumpu market share above 50%. The EC cleared the merger on the condition that the Italian Inoxum subsidiary Acciai Speciali Terni (AST) was excluded from the deal, and OTK acquired Inoxum in December 2012.[7] Through Inoxum, Outokumpu acquired stainless steel mills in China, Mexico, Germany and in Alabama, USA. On 30 November 2013, Outokumpu announced it would sell AST, certain service centers and VDM business to Thyssen Krupp, and in turn, ThyssenKrupp would sell its 29.9% shares in Outokumpu, and sever all other "relevant links" between the two companies.[8] At the same time, on 30 November 2013, Thyssen Krupp announced the same: that it would reacquire AST and other so-called 'remedy assets' as well as VDM (high-performance alloys) from Outokumpu, that it would sell its 29.9% shares in Outokumpu, and sever all other "relevant links" between the two companies. In February 2014, the EC cleared the AST and VDM acquisition by ThyssenKrupp.[9]

In July 2014, OTK agreed to settle with Boliden and engineering group IMI, who had sued OTK in 2012 to cover Boliden’s losses from the lawsuit over price-fixing of copper tubing.[10]

Production sites

Finland

OTK's largest production facilities are the integrated steel mills of the Tornio Works, in the small Finnish town Tornio on the coast of Gulf of Bothnia. Tornio Works produces hot rolled and cold rolled coils and sheets cut from coil, with an annual output of one million tonnes. The site consists of ferrochromium smelting, two steel-melting shops, a hot rolling mill and two cold rolling mills. The steel works were built in 1975–1976. The first stainless cast was made in May 1976, week 19, thus it has got the heat number 61901.The main marketing area is the EU. Up to 85% of the products are exported all around the world.

In March 2011 5 employees of Tornio works were alleged to have laundered money (between €69,000 and €13,714,000) related to exports to Russia between 2004 and 2006 per the District Court of Kymenlaakso in Kouvola.[11] In June 2011, the Court dismissed charges and ordered the Finnish State to compensate OTK with EUR 1.2 million for its legal costs. The State Prosecutor appealed against this judgement and in February 2012 legal proceedings commenced in Kouvola Court of Appeal per OTK's 2011 internal audit report[12] On 19 April 2012, the Court dismissed all charges. to which Finland’s state prosecutor filed a petition for leave in June 2012, to appeal to the Finnish Supreme Court.

Kemi mine in Keminmaa near Tornio provides chromite, the raw material for chrome, needed to make stainless steel. In 2012, the quantity of chromite was estimated to a depth of one kilometer, totalling some 105 million tonnes.[13]

Sweden

Avesta Sheffield was acquired 2001 and consists of a stainless steel mill with melting shop, hot rolling for heavy plates, hot rolling for 2000 mm width coils by Steckel mill and cold rolling mills. Avesta developed special stainless steel grades, high-alloy austenitic and duplex grades, optimized for good formability, weldability and high corrosion resistance.[13] Avesta has a long history in steelmaking, similar to Sheffield in the UK.

Thin Strip Nyby (see also Nyby bruk) produces cold rolled stainless steel, concentrating on special grades, part of the Special Coil business line.[13] Nyby Ironworks in Torshälla was founded in 1829 by Adolf Zethelius, but ironworking on the site is first documented in the 15th century when the Bishop of nearby Strängnäs founded hammer forges by the waterfall near Nyby.

United Kingdom

The Sheffield facility includes a melt shop, continuous casting, a bar finishing facility and rod mill which are part of OTK's Long Products business, also a stocking, processing and distribution center. Production includes stainless steel in coil, plate, sheet, coiled rod, bar and rebar forms; semi-finished products including slab, bloom, billet and ingot are also manufactured.[14]

Outokumpos UK acquisitions derived from the works created in 1950 as a joint venture between Firth Vickers (see Firth and Vickers) and Samuel Fox and Company for cold rolling stainless steel, established at Shepcote Lane, Sheffield, originally manufactured under the Staybrite brand. In 1967 the industry was nationalized into the British Steel Corporation. Outokumpu's original three sites in the UK were in Sheffield, Stocksbridge, and Blackburn.

In 2005 the cold rolling and finishing units, Coil Products Sheffield on Shepcote Lane were closed, with the loss of over 600 jobs. Production ceased in the first half of 2006. The company continued the melting shop, special strip cold rolling and finishing, bar rolling, and UK distribution. At the end of March 2008 the Stocksbridge site production ceased after 80 years, with work transferring to its Meadowhall site.

Germany

As of 2013 there were sites in Krefeld, Benrath, Dahlerbrück, Dillenburg and a melt shop in Bochum.

The Krefeld mill with 100 years of experience in stainless steel production, closed its melt shop in December 2012 and re-focused on cold rolling and R&D. The Benrath cold rolling mill was to relocate to Krefeld, to make a range of grades, dimensions and surface finishes. The Dahlerbrück cold rolling mill is located in Sauerland producing precision strip and looks back on a 300-year tradition of iron and steelmaking. The cold rolling mill in Dillenburg specializes on surface finishes for example in architecture, building and construction. The Bochum melt shop is on fast track for closure since October 2012, to close by 2014.[15]

U.S. and Mexico

Outokumpu has an integrated stainless steel mill in Calvert, Alabama involved in melting and rolling coil; a hot rolling mill in New Castle, Indiana; a plant in Wildwood, Florida which produces pipes and tubes; a bar product plant in Richburg, South Carolina; and a cold rolling mill in San Luis Potosí (Mexico) which manufactures coil, strip, sheet, circles and plate.[16]

Organization

The company is led by a board of eight directors members, and a 'leadership team'.[17]

References

  1. ^ a b c d e f "Annual Report 2014" (PDF). Outokumpu. Retrieved 23 April 2014.
  2. ^ "Outokumpu fact sheet". outokumpu.com. Retrieved 25 February 2014.
  3. ^ "STAINLESS STEEL CARTEL COMMISSION FINES SEVEN MAJOR PRODUCERS A TOTAL OF 425 000 ECU". European Commission. 18 July 1990. Retrieved 18 August 2014.
  4. ^ a b "Commission fines companies in industrial copper tubes cartel". European Commission. 3 September 2004. Retrieved 18 August 2014.
  5. ^ "Luvata in Russia". Retrieved 1 April 2014.
  6. ^ "Outokumpu's remaining copper tube assets sold to Cupori Group". Retrieved 18 July 2008.
  7. ^ "Outokumpu has completed the Inoxum transaction and assumes the leading position in the stainless steel industry" (press release). Espoo,Finland: Outokumpu. 28 December 2012.
  8. ^ "Outokumpu announces comprehensive measures to strengthen balance sheet and divests Terni and VDM to ThyssenKrupp" (press release). Espoo, Finland: Outokumpu. 30 November 2013.
  9. ^ European Commission (12 February 2014). "Mergers: Commission clears reacquisition of Acciai Speciali Terni and VDM by ThyssenKrupp, concluding the remedy implementation process following the Outokumpu/Inoxum merger". Press release. Brussels. Retrieved 25 February 2014.
  10. ^ "Steel giant Outokumpu agrees pay-out over cartel claims". Yle Uutiset. 15 July 2014. Retrieved 18 August 2014.
  11. ^ Outokumpu - the investigation of Outokumpu's export practices to Russia completed, 23 November 2010[dead link]
  12. ^ "Corporate Governance, Risk management, Internal audit". outokumpu.com. Retrieved 25 February 2014.
  13. ^ a b c "Outokumpu production sites in Sweden". outokumpu.com. Retrieved 25 February 2014.
  14. ^ "Outokumpu production sites in the UK". outokumpu.com. Retrieved 25 February 2014.
  15. ^ "Outokumpu production sites in Germany". Retrieved 25 February 2014.
  16. ^ "Outokumpu in Americas". Retrieved 25 February 2014.
  17. ^ "Outokumpu's organization". Retrieved 25 February 2014.
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