Ovako is a European special steel manufacturer that is part of the Sanyo Special Steel group. The company is working on some of the world’s most innovative measures toward realizing CN, for instance by operating a carbon free hydrogen production plant at their core site in Hofors (Sweden). CEO Mr. Marcus Hedblom was interviewed at the company’s headquarters in Stockholm and talked about such matters as the company’s future prospects.
―Although Europe’s economy has been struggling, Ovako’s earnings have remained steady.
“While we saw a drop in sales volume from the previous fiscal year due to facing challenging economic conditions, we have still been able to secure a certain level of volume in part due to the trust we have built with our customers, and overall we have also been able to maintain prices. We are working on making production adjustments and reducing costs toward securing steady levels of revenue.”
―What are some of the advantages that Ovako has over its competitors?
“One of our advantages is the fact that we are the ‘No.1 organization in terms of CO2 efficiency’. According to evaluations made by a third-party institution, Ovako’s steel products emit the fewest amounts of CO2 in the world. In addition, all of the special steel products and services we provide are of the highest quality, and we are capable of catering to our customers’ sophisticated needs. We are able to meet diverse needs by having a wide-ranging business portfolio with our 3 business units operating in locations in Sweden and Finland.”
―How does your company procure scrap?
“We purchase scrap from Sweden and Finland. Both countries export scrap, and we are able to procure scrap at relatively favorable prices in the European market. 97% of the raw materials we use to manufacture steel products are recycled materials, and so we also play a significant role in terms of resource circulation.”
―How does your company procure electricity?
“All the electricity we procure and use is carbon free electricity. Sweden and Finland have ample renewable energy supplies, and so we are in an advantageous location where it is easy to procure both scrap and non-fossil fuel-based electricity.”
―You are considering installing additional hydrogen production plants.
“Taking into account the knowledge and experience we have been accumulating through our operations at Hofors, we will consider installing additional plants in Smedjebacken (Sweden) and Imatra (Finland). In the case of Finland, the Finnish government is considering establishing a hydrogen supply network, and the facilities to be established in Imatra may become a model case for the supply network plan.”
―How are you utilizing the synergies between your company and Nippon Steel/Sanyo Special Steel?
“We have been cooperating in various areas, mainly in such areas as production efficiency improvement, sales strategies and R&D, and we have been able to produce significant results. In addition, interacting with companies based in different countries has been a very positive and stimulating experience that has significantly energized our organization. When recruiting human resources, we have been actively emphasizing those international interaction opportunities, and our company being part of a ‘family’ of major Japanese manufacturers has become one of the key incentives of joining our organization.”
―The demand for green steel products has been growing.
“In Europe, many customers are pursuing reducing the CO2 emissions from their supply chains as a whole, including the emissions from procuring raw materials, and thus our efforts have been extremely well received. In addition, going forward CO2 emissions costs will increase as the free allowances in the EU ETS (Emissions Trading System) are gradually phased out, and this will further improve the competitiveness of green steel products.”
―How do you regard the future prospects of Ovako?
“CN has become an important challenge, and organizations around the world are pursuing measures toward reducing CO2 emissions. Being based in Sweden and Finland provides an advantage for us since it is easy to procure scrap and carbon free electricity, and in addition our company has various superior technologies and production facilities that we have been establishing over the years. We will further improve this superior competitiveness and pursue realizing sustainable steel production.”