As the impact of economic crisis gradually fades, global refractories industry ushers in a new stage of development. Refractories Window is pleased to interview Mr. Francois Wanecq, Chief Executive of Vesuvius Plc, on the current situation and future prospect of global refractories industry.
Refwin: How do you comment on the current situation of refractories industry?
Francois Wanecq: Since the beginning of the century, heavy industries have been supported worldwide by the rapid industrialization of China. Steel, cement, aluminum and glass world production have almost doubled over the period. The supply of equipment to the Chinese industry has created additional markets for the developed economies.
The refractory industry has benefited from this trend all over the world.
Today the Chinese economy is changing and the need for infrastructure and equipment will shift progressively towards consumer goods. This will create a change in the refractory needs as volume growth will slow down, but at the same time quality and performance will need to improve. The refractory industry must get prepared for this evolution by adapting capacity to the new levels of demand and by investing in quality and service improvements to meet higher customer expectation.
Refwin: What developments have you planned in Vesuvius?
Francois Wanecq: Vesuvius is committed to the high performance refractory segment. We deliver consumable products that are critical to the process of our customers and we produce locally to be able to give our customers an optimal service. For some time, we have been planning for the evolution of the market geography and have been investing heavily in Asia. Today we are entering in a new development of our strategy that will not be focused only on refractories but offer a wider range of technical services to our customers. These services are targeted at helping our customers to improve their process performance, lower their costs and upgrade their quality.
Refwin: How do you judge China’s role in refractories market?
Francois Wanecq: China is by far the largest refractory market in the world. Consequently, its evolution will have a significant impact on the broader global refractory industry. The Chinese refractory industry has grown rapidly to support the industrialisation of the country. It is today the largest in the world in terms of volume. However it will soon be confronted with the reorientation of the Chinese steel industry towards higher value markets which will require a shift from a predominance majority of long products towards higher quality flat products. Excess capacity in lower quality refractory products can be expected together with strong competition at the higher quality end as suppliers attempt to rebalance their businesses. This will be a difficult challenge which is likely to require consolidation and restructuring of the supplier base. However the Chinese refractory industry will emerge stronger and more competitive.
Refwin: Do you have any suggestions for developing refractories companies?
Francois Wanecq: In the coming years the dominant need will be for quality and innovation rather than volume. Developing companies should concentrate on technology and address the specific needs of their customers arising from the evolution of the market. Customer energy consumption and CO2 emissions will play an increasing role in the evaluation of supplier performance. Refractory technology can play a key role in this respect.
It must also be considered that in a period of possible restructuring, priority should be given to financial robustness.
Refwin: What is trend of refractories industry in next 5 years?
Francois Wanecq: In the mid-term, the refractory industry will face a radical change in its demand in China, which, due to its scale and importance, will inevitably impact the global market. Concentrations and mergers will be necessary and the globalization of the industry will continue. However the shift from volume to quality in the Chinese refractory industry is ultimately a positive one for suppliers and customers alike, that may potentially impact the refractory industry world-wide.
Refwin: Thank you very much for accepting our Interview.
AD
