Refwin: As the President of WRA, what is your primary mission? What achievements have you made since taking office at the beginning of the year and what do you think WRA should focus on in 2019?
Mr Stefan Borgas: The primary objective of WRA, a very young and new organization, being in the third year of its existence, is to bring all of the global refractories enterprises together, as the refractories industry is highly fragmented with thousands of small companies never being together, with every country possessing its own association like ACRI in China.
The good news is that 2018 has witnessed fast-growing membership by getting the major companies and almost all of the regional or national associations to join WRA, which will continue also in 2019.
Moreover, some work communities have been created within WRA, including the technical community and the safety community, which are starting to focus on the joint problems.
The challenge is to start data collection on a worldwide basis to show what the refractories industry is, what it does, how strong it is, how important it is, etc. WRA is still in the set-up phase to get these things started.
Refwin: What other qualifications should companies possess besides their financial data when they would like to become WRA members? How do you evaluate and coordinate the differences and imbalance among association members currently spread over the three continents, Asia, America and Europe?
Mr Stefan Borgas: It is necessary for WRA to define very simple global criteria that can be applied globally, since it is a worldwide association. Of course, every country has its own particularities, and sometimes the objectives of Chinese companies are different to the objectives of German companies, US companies, or Brazilian companies. That’s why no more specific criteria can be defined. But if a company wants to work with WRA, there is no problem. Any company, big or small, which is a member of ACRI or other regional or national associations, can also actively work in WRA, in the communities, to work together on data collection, safety or technology issues, or help on the customers’ duties, or standardization. They can just talk to their local association if they want to be part of a committee. ACRI or other local associations can nominate a person from any company to work in the committees. It’s just a structure to join WRA, but WRA encourages all the companies in the world to work together.
The differences between global companies are a characteristic of the refractories industry. We don’t want to make everybody the same. The strength of our refractories industry is that everybody is different. That’s good for our customers. For example, some topics are more important to some companies, while other topics are more important to others. Each time 2 or 3 companies have the same issue, they can contact WRA and WRA can help work on it. Therefore, let the industry blossom in differences!
Refwin: Yes, difference provides strength and prosperity. In terms of industry positioning and medium- and long-term goals, what is your opinion on WRA in the next few years? As far as I know, WRA has joined the World Steel Association (WSA), right? Which industry problems should be solved by WRA?
Mr Stefan Borgas: Putting it in one word, it will be ‘recognition’, because the refractories industry is not very well known at the current stage. However, it is completely essential, because most materials in the world cannot work without refractories, yet nobody knows this, even our customers, who buy our products. If one doesn’t work directly with refractory products, he or she doesn’t know the importance. Because there are so many small companies, nobody has the power to make the whole sector recognized, but WRA can do that. So the primary objective in the coming years is to get recognition, first of all for our existence. That’s not really enough, but for the importance that it brings and for the role that it can play, WRA can help to improve the world. In addition, if we can work with our customers to make the production of all of these materials better, cleaner, safer, more cost efficient, use less energy and cause less pollution, WRA can do better, which would be a very big step forward.
Exactly, joining WSA (World Steel Association) as a member is one of the steps WRA has taken this year. Now WRA is starting to participate in the world steel meeting, which is just one example of all the many things that WRA does. Personally, I am a member of the economic committee of WSA, and some of my colleagues are members of other committees.
Refwin: It is the first time for WRA to hold a Board Meeting and General Assembly in China. Could you explain the original intention and reason?
Mr Stefan Borgas: As I have said before, WRA is a very young association, only three years old; it is the third general assembly, which is already in China, not only with a WRA board meeting, the general assembly, but also with the first conference that WRA has ever organized. Therefore, it’s quite a clear sign that of course China is the largest refractories market in the world and the largest market for our customers. If we want our customers to know us better, we must be present here, not only as ACRI, which does a very good job representing the Chinese refractories industry, but also as a worldwide community. So it is very important that the first meeting was in Europe, the second meeting was in South America, and now the third meeting is in China. The general assembly is a good example, because it votes for new members. There are six new members to join WRA, and four are from China.
Refwin: What do you think of China's intensifying environmental regulations and refractory raw materials shortage? What is your opinion on global customers' solutions and future supply and demand patterns? Do you have any suggestions for and expectations of Chinese refractories manufacturers?
Mr Stefan Borgas: I think the Chinese government is to be commended. It was necessary and fully acceptable and the refractories industry is at least fully supporting the great action. There were, of course, some problems, because the enforcement of the environmental regulations started relatively suddenly so that everybody was surprised over one year ago; but now everyone is getting used to them.
I don’t think that the supply and demand pattern will change, since China has very large reserves of refractory raw materials. However, China may have given away its raw materials too cheaply. Every refractories player has to learn that raw materials taken from the earth are very precious, and once they have been taken, they are gone. Therefore, each player has to be much more careful in what is taken from the earth, how it is converted into materials, and how value is added. In the case of refractories, refractory raw materials are to be converted to refractory products that can then be converted into very long-term solutions, like power plants, housing, big buildings, wire rods, cars, and other things that last for a long time. Therefore, it’s essential to use refractory raw materials for these applications, but conversion should be done in a more careful way. Until two years ago, this was not always the case in China; environmental control has been accelerating the change of the situation, which the refractories industry needs to get used to, and a new balance has already established itself, with no more shortage now.
My suggestion is to think about how to develop and improve refractory solutions. Volume is not the only solution to develop business. Just making materials and selling them cheaply doesn’t create the kind of solution that should be created. So the products have to be combined with service and then sold together in order to provide solutions to customers. The cost of products for customers is very low, but we need to demonstrate to our customers that the value is not in the material alone. Rather, the value is in the know-how that goes into the design of material specifically for the customer. The service we can provide is that we put the material exactly in the right position and in the right way for the customer to use it at their site; this way, we can create much more value for the customer than by just selling materials. In the end, it is much cheaper for customers, because they can lower their cost significantly and the price of materials will be not important any more.
Tailor-made products and services also support customers in using them properly. Many customers do not measure the use of refractories accurately; they don’t even measure accurately during their own process. They don’t know exactly, for example, what temperature the steel has at every point in the plant. One big opportunity for refractories providers is to reduce the energy consumption of steel makers, which can save billions of RMB. This is not about reducing temperature as the first measure, but about reducing the energy after temperature measurement. This is just an example of what refractories manufacturers should do, and quite a step away from simply shipping some tons of goods.
Refwin: With regards to the development trend of the global refractories industry, what can we expect in next years, in terms of new direction of R&D, new types of refractories, and new trends of the industry?
Mr Stefan Borgas: The refractories industry will, in my opinion, continue to consolidate in the next few years, for it needs a huge amount of funds, efforts and resources to develop more complex technology or solutions, which is usually done by companies of a certain size, with small companies merging together for this purpose. This comes to be one trend.
The second trend is going to be the balance of capacity of raw materials. Demand will be more stable in the future than now. In the past we have had a lot of capacity which I think will disappear.
Concerning the market share of monolithic refractory materials, it looks likely to change. Pressure in Japan, for example, has been much higher in the last three or four decades for the refractories makers to help their customers to improve the quality of steel, and also to increase the lifetime of their refractories. That was the big focus I think, and it is now very quickly becoming the demand of Chinese customers who want to have the same.
As for the refractories industry in China, we have to adapt to this and support this trend. This will automatically change the portfolio to balance the different types of applications. But in reality these things work together in the high-tech refractory usage, you have shaped products, unshaped products and functional products and technology all working in one package.
Refwin: Thanks for taking the time to have the interview with Refwin. Let’s hope for a more prosperous new era of the refractories industry under your leadership in WRA.