RHI Magnesita to meet expectation despite the energy crisis

2022-11-02

Nov. 2, 2022 - In an exclusive interview, RHI Magnesita CEO Stefan Borgas mentions that the company is on track to meet expectation this financial year despite the energy crisis. Below are the main takeaways from the conversation:

“Very early in March… we have already started to plan for the replacement of gas with other fuels. We are now in the position to replace 50% of our gas demand. That means we will have no supply issues throughout this winter, and hopefully, not the next few winters, until there’s enough energy from other sources.”

… Longer term, the company is going to look at renewables as a way of powering some of its operations. “At these high temperatures, the only viable alternative fuel is hydrogen. In order to produce large quantities of hydrogen competitively, we need large quantities of green electricity, which need to be built in Europe. The incidents in Ukraine lead to a significant acceleration of this reconstruction, but it still going to take 3-4 years until we start to switch to hydrogen.”

Commenting on the demand side during the global economic slowdown: “Europe is softer now… We expect this to last into the next year… But it is a recession, not a collapse. The US is by far not as strongly impacted as Europe; we have significant growth in India and Middle East; that balances out some of the European downturns. We are positive about the next year.”

“Everything around nonferrous metals, copper, zink and those kins of specialty materials are very robust. Their commodity prices are very high, and their investments go through. There’s also a certain decoupling from Russia… The things are relatively strong here.”