"Our benchmark is to be competitive with Chinese players who are growing in quality and culture, having invested heavily in schools and training, unlike what happened in Italy," said Gianpietro Benedetti, president of the Italian plantmaker Danieli Group, during a press conference held to present both the company’s 2019-2020 financial results and the new quality wire rod mill plant of its subsidiary Acciaierie Bertoli Safau (ABS). The plant will go into operation by November and will be the largest wire rod line in the world, according to Danieli. Built in 18 months with an investment of €190 million, it will have a production capacity of 500,000 mt per year.
Danieli closed the 2019-2020 financial year with a net profit of €62.9 million, down six percent year on year due to production limitations and the postponement of some projects after the Covid-19 emergency. It also recorded revenues totaling €2.803 billion (-9%) and an EBITDA of €187.7 million (-22%).
The forecasts for the next two years are for growth in terms of both turnover and EBITDA. In 2020-2021, a turnover in the range of €2.9-3.1 billion is expected, with an EBITDA of €210-220 million. For 2021-2022, the group expects a turnover of €3.1-3.2 billion and an EBITDA of €240-260 million, of which around 58 percent will come from the plantmaking division and 42 percent from the steelmaking division.
Going back to the issue of competition, company president Benedetti stated that the group will have to lower its costs in order to align them with those of Chinese and Indians competitors, while maintaining "a very high technological level to preserve the gap that still separates us from those countries, but which is rapidly getting thinner." In the past year, China represented 53 percent of the market in the group's plantmaking division. In Europe, explained Giacomo Mareschi Danieli, CEO of Danieli, investments "are mainly oriented towards green steel, for which I believe Europe will be the leader of change. In the US, Trump's policy has pushed investment a lot. Now we will see what happens with the elections. Russia has given us great satisfaction: it has resources, market and territory and will have to take environmental steps shortly." Regarding Danieli's steelmaking division, Mr. Benedetti said he expects an acceleration of the selection process of competitors in the market due to the pandemic, also with a likely increase in acquisitions.