Outokumpu

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Outokumpu Oyj
Julkinen osakeyhtiö
Traded asNasdaq HelsinkiOUT1V
IndustryStainless steel
Founded1932
HeadquartersHelsinki, Finland
Key people
Kari Jordan (chairman), Roeland Baan (President and CEO)
ProductsStainless steel
RevenueDecrease €5.69 billion (2016)
Decrease €103 million (2016)
Increase €144 million (2016)
Total assetsIncrease €5.99 billion (2016)
Total equityIncrease €2.416 billion (2016)
Number of employees
Decrease 10,600 (2016)
Websiteoutokumpu.com
Footnotes / references
[1]

Outokumpu Oyj is a group of international companies headquartered in Helsinki, Finland, employing 10,600 employees in more than 30 countries. Outokumpu is the largest producer of stainless steel in Europe and the second largest producer in the Americas. Outokumpu also has a long history as a mining company, and still mines chromium ore in Keminmaa for use as ferrochrome in stainless steel. The largest shareholder of Outokumpu is the Government of Finland, with 26.6% ownership, including the shares controlled by Solidium, The Social Insurance Institution of Finland, Finnish State Pension Fund and Municipality Pension Agency.

Company history[edit]

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.[2]

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.[citation needed]

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.[citation needed]

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 steel 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, Outokumpu 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]

In October 2015, Outokumpu announced the divestment of 55% shares in its Shanghai-based joint venture between Outokumpu (60%) and Baosteel (40%), Shanghai Krupp Stainless (SKS), to Chinese real-estate investment fund Lujiazui International Trust Co. Ltd.[11] In a second step, Outokumpu divested the remaining 5% of its holdings in February 2016 to the same investor. In total Outokumpu recorded a non-recurring capital gain of EUR 389 million (net of taxes and debt repayment) for the sale of the entire 60% share in SKS. At the same time, the Board of Directors of SKS decided to stop the operations of SKS and release the workforce.[12]

In March 2017, employing 100 people, the company opened its global service center in Vilnius, Lithuania.[13]

Production sites[edit]

Finland[edit]

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.[14] 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[15] 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.[16]

Sweden[edit]

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.[16] 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.[16] 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[edit]

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.[17]

Outokumpu's 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[edit]

As of 2018 there are production sites in Krefeld, Dillenburg and Dahlerbrück.

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 nearby Benrath cold rolling mill in Düsseldorf was relocated and joined with Krefeld operations, 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 was closed in 2014.[18]

U.S. and Mexico[edit]

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.[19]

Organization[edit]

The company is led by a board of directors and a leadership team.[20]

At the beginning of 2018, the members of the Outokumpu Leadership Team held the following positions:[21]

  • President and Chief Executive Officer, Roeland Baan, b. 1957, Dutch citizen
  • Chief Financial Officer, Christoph de la Camp, b. 1963, German citizen
  • President, Business Area Europe, Maciej Gwozdz, b. 1975, Polish citizen
  • President, Business Area Americas, Michael S. Williams, b. 1960, US citizen
  • President, Business Area Long Products, Kari Tutti, b. 1970, Finnish citizen
  • Executive Vice President – Supply Chain Management Europe, Liam Bates, b. 1971, UK citizen
  • Executive Vice President – Sales Europe, Olli-Matti Saksi, b. 1967, Finnish citizen
  • Executive Vice President – Business Transformation and IT, Jan Hofmann, b. 1979, German citizen
  • Executive Vice President – Communications and Investor Relations, Reeta Kaukiainen, b. 1964, Finnish citizen
  • Executive Vice President – Human Resources and Organization Development, Johann Steiner, b. 1966, German citizen

References[edit]

  1. ^ http://www.outokumpu.com/en/investors/financials/Pages/default.aspx
  2. ^ B. Honig, et al., eds. (2014). Handbook of Organizational and Entrepreneurial Ingenuity. Edward Elgar Publishing. p. 257.
  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". Archived from the original on 17 May 2008. 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 divests 55 percent of a Chinese joint venture for EUR 370 million" (press release). Espoo, Finland: Outokumpu. 19 October 2015.
  12. ^ "Outokumpu divests its remaining share of the SKS, operations to be stopped" (press release). Helsinki, Finland: Outokumpu. 2 February 2016.
  13. ^ "Suomijos nerūdijančio plieno milžinė atidarė biurą Vilniuje – įdarbins 100 darbuotojų".
  14. ^ Outokumpu – the investigation of Outokumpu's export practices to Russia completed, 23 November 2010, archived from the original on 8 October 2011
  15. ^ "Corporate Governance, Risk management, Internal audit". outokumpu.com. Retrieved 25 February 2014.
  16. ^ a b c "Outokumpu production sites in Sweden". outokumpu.com. Archived from the original on 30 August 2014. Retrieved 25 February 2014.
  17. ^ "Outokumpu production sites in the UK". outokumpu.com. Archived from the original on 31 August 2014. Retrieved 25 February 2014.
  18. ^ "Outokumpu production sites in Germany". Archived from the original on 25 February 2014. Retrieved 25 February 2014.
  19. ^ "Outokumpu in Americas". Retrieved 25 February 2014.
  20. ^ "Outokumpu's organization". Retrieved 25 February 2014.
  21. ^ "Leadership Team". Retrieved 1 November 2018.

External links[edit]

Media related to Outokumpu (company) at Wikimedia Commons