2017-04-01
Mr Stefan Borgas, CEO of RHI AG
Refwin: Announced
on 5 October 2016, RHI and Magnesita combined to create a leading refractory
company named RHI Magnesita. What reason facilitates this combination?
Mr Stefan
Borgas: Once the combination of RHI and Magnesita receives approval by the
authorities, RHI Magnesita will become a leading refractory company. This
combination would enable a complementary asset portfolio (high-quality
magnesite and dolomite-based products) and regional complementarity, efficient
cost structures in important operative areas and an optimized working capital.
Strategically, the broader production footprint would mean faster delivery
service, shorter lead times and more flexibility. Further, the combination
would allow to continue drawing on the strengths of global R&D laboratories
and resources, in order to ensure distinctive solutions for our customers.
Refwin: How
would the combinations affect global refractories and steel industry?
Mr Stefan Borgas: Once the
combination of RHI and Magnesita receives approval by the authorities, the new
company will create a global number one. RHI Magnesita will combine its
refractory producing facilities and refractory raw material resources. The
combined company will present a complementary asset portfolio and a global
presence. The resulting cost improvement will allow the continuation of the
best service for its steel and non-steel customers possible despite the
tremendous cost pressure in the refractory industry.
Refwin: Recently,
more and more steel companies in China prefer to collaborate with whole
refractories contractors to reduce their costs. Please tell us some RHI’s
experience in steel industry.
Mr Stefan
Borgas: Steel plants have full focus on refractory costs. Some of them have
in-house refractory suppliers themselves. Refractory installation and
maintenance are some of the last bastions of hard labour in steel plants. This
is why we collaborate closely with steel producers to find solutions aiming at
reducing exposure of workers to these severe working conditions, requiring a
mutual trust of both, customers and suppliers. The huge benefit for our steel
customers in collaborating with our company is not so much in the price
reduction of refractory material buying, but in the dramatic reduction of total
operating cost due to integrated services, longer usage times and world class
technical analytics that we can provide inside our customers operations.
Refwin: Material
self-sufficiency is obviously an important topic. What are you doing to further
improve the self-sufficiency in your plants?
Mr Stefan
Borgas: Material self-sufficiency is not a goal in and by itself. But raw
materials are a substantial part of production costs. The access to and
availability of high-quality raw materials are essential for refractory
products, since they influence their performance. The strategic focus is set to
optimize the balancing of in-house supply and external purchases.
Refwin: What is the RHI’s
general strategy in the refractories segment? How do you see developments in
the medium term? Will there be investments in new markets?
Mr Stefan
Borgas: RHI has a clear strategy. First, aiming at selective business expansion,
with a focus on growth regions and attractive market niches. Second, RHI
continuously aligns its offer to specific customer requirements. This means
differentiation based on technology leadership and service in strategically
important segments. Moreover, RHI aligns to structural market changes. Third, RHI
will focus on balancing in-house supply and external purchases. The priority is
balancing the strategic use of internal magnesia supply and external purchasing
and selling options. Fourth, RHI will continue to drive its cost
competitiveness in order to continue to invest into new technologies with the
help of its in-house R&D teams and together with technology partnerships
around the world.
Should the
combination of RHI and Magnesita be approved by authorities, the combined
company will be a leading refractory company with an enhanced growth profile
due to improved regional presence and complementary asset portfolios. RHI
Magnesita will be in an advantageous position to serve its customers even
better than before for the very long term.
Refwin: Thanks you very much for talking to us!
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