Feralpi to invest €60 million in new rolling mill in Germany

Thursday, 16 May 2019 16:41:14 (GMT+3)   |   Brescia
       

At the presentation of the 2018 financial results of Italian long steel product producer Feralpi Group, company president Giuseppe Pasini stated that the company will invest €60 million in Germany to increase production at its subsidiary ESF Elbe-Stahlwerke Feralpi GMBH, located in Riesa, Saxony, by 400,000 mt. Accordingly, in 2021 a new rolling mill will be ready and will produce rebar and ribbed coils, alongside the existing 900,000 mt capacity rolling mill. The new plant is still in the planning phase and the supplier has not been chosen yet. Mr. Pasini said the investment shows that Germany continues to be the main market on which Feralpi is focusing thanks to local infrastructure projects that continue to fuel good demand for steel.

As regards the group's results, in 2018 Feralpi Holding achieved its best results of the last ten years: EBITDA went from €99.6 million in 2017 to €126.2 million in 2018. Its net profit amounted to €53.7 million, up from €30.6 million in the previous year. Turnover amounted to €1.32 billion, compared with €1.199 billion in 2017. 62 percent of turnover was generated outside Italy. However, while the foreign component of the turnover linked to non-EU countries has shrunk, the share due to other EU countries has increased. "We continue to be able to seize opportunities in the northern European markets," declared Mr. Pasini. "In particular, our German company fully exploits a market that is still going well". As for non-EU countries, "The downsizing of volumes destined to Algeria, due to changes in the market situation, was partly offset by sales to the US, Canada and Mexico, although these are more difficult markets than the Algerian one. In the US, we managed to sell €120 million of products in 2018, thanks to the fact that Trump's duties have led to an increase in local prices," Pasini explained.

In 2018, Feralpi's production volumes increased, albeit not significantly: billet output increased by 2.3 percent to 2.5 million mt, and hot rolled product production rose by 0.6 percent to 2.1 million mt. "Despite the fact that production has not increased much, EBITDA has risen thanks to better margins due to higher prices," Pasini stated. "The volumes are still good, but we have already seen that 2019 will not be like 2018 in terms of margins. Nevertheless, I don't think we can complain," he added.


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