[Asian Steel Watch] Vol.1(2016.1)
Interview with worldsteel Chairman
Wolfgang Eder, 63, has been Chairman of the Management Board of voestalpine since 2004. Under his leadership, the Group almost tripled its revenue from around EUR 4 billion to more than EUR 11 billion and developed from a traditional European steel-producing company to a technology and capital goods group that operates globally and enjoys above average profitability.
Mr.Eder took over the office of worldsteel Chairman for a second term in October 2015 – the first time in the 50-year history of the organization that an incumbent Chairman was reelected. worldsteel is the second largest industry association worldwide, which has around 170 association members, representing 85% of global steel production. He was also President of the European Steel Association EUROFER from October 2009 to May 2014.
Dr. Wolfgang Eder
Chairman and CEO of voestalpine AG, Chairman of worldsteel
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The New Normal Era and How to Survive It
1. Vol.01 January 2016 1716 Asian Steel Watch
Q: How do you describe the business, value,
and vision of voestalpine in brief?
A: The voestalpine Group is a steel-based
technology and capital goods corporation
with operations worldwide. Headquartered
in Austria, we are specialized in the produc-
tion and processing of high-quality steel and
other materials to be supplied largely to the
global automotive, consumer goods, me-
chanical engineering and energy industries
as well as railway companies and aircraft
producers. voestalpine holds international
leading positions in all its four divisions and
is world market leader in turnout technol-
ogy, special rails, tool steel, and special sec-
tions. With nearly 50,000 employees at more
than 500 companies and locations in more
than 50 countries around the world, the
Group reported EUR 11.2 billion of revenues
at a profitability of almost 14% (EBITDA) in
the last business year. According to our 2020
strategy, we aim at long term international
growth and are constantly searching for
new opportunities to establish sustainable
business models. With a clear focus on the
customer segments mobility and energy and
on non-European growth markets, we are
significantly investing in the expansion and
erection of new plants particularly in North
America and Asia. In addition to recent
installations of new facilities in the USA,
further significant investment is also being
made in China, where we just opened a new
automotive parts plant in October, 2015
and will commission two more this year.
The current construction of a EUR 550 mil-
lion direct reduction plant in Texas, which
will produce two million tonnes of HBI (hot
briquetted iron) per year from 2016, is the
largest foreign investment made by the
Group, or any Austrian company in the USA
to date.
Q: Since you were appointed as Chairman
of the Management Board and headed the
Group’s steel division in 2004, the Group
has almost tripled its revenue and developed
from a traditional European steel-producing
company to a technology and capital goods
group. Your company
survived the European
fiscal crisis and made
a series of innovations
with high growth. How
was the transformation
and innovation with
growth possible?
A: Following the motto
“Not more steel, but
making more out of
steel,” we started to
implement a downstream strategy almost
15 years ago, which has proven to be the
absolutely right step in securing long term
growth and profitability in a rather fast
changing market environment. Especially
compared with the merger- and takeover-
manner of the European steel industry in
these days it has proven to be the more suc-
cessful strategic alternative in the long run.
By driving forward acquisitions and invest-
ments designed to consistently extend the
We started to implement a
downstream strategy almost
15 years ago, which has
proven to be the absolutely
right step in securing long
term growth and profitability
in a rather fast changing
market environment.
The New Normal Era and
How to Survive It
I N T E R V I E W
with worldsteel Chairman
Dr. Wolfgang Eder
Chairman and CEO of voestalpine AG, Chairman of worldsteel
Wolfgang Eder, 63, has been Chairman of the Management Board of
voestalpine since 2004. Under his leadership, the Group almost tripled its
revenue from around EUR 4 billion to more than EUR 11 billion and developed
from a traditional European steel-producing company to a technology and capital
goods group that operates globally and enjoys above average profitability.
Mr.Eder took over the office of worldsteel Chairman for a second term in
October 2015—the first time in the 50-year history of the organization that an
incumbent Chairman was reelected. worldsteel is the second largest
industry association worldwide, which has around 170 association
members, representing 85% of global steel production. He was
also President of the European Steel Association EUROFER from
October 2009 to May 2014.
The New Normal Era and How to Survive It
2. Vol.01 January 2016 1716 Asian Steel Watch
Q: How do you describe the business, value,
and vision of voestalpine in brief?
A: The voestalpine Group is a steel-based
technology and capital goods corporation
with operations worldwide. Headquartered
in Austria, we are specialized in the produc-
tion and processing of high-quality steel and
other materials to be supplied largely to the
global automotive, consumer goods, me-
chanical engineering and energy industries
as well as railway companies and aircraft
producers. voestalpine holds international
leading positions in all its four divisions and
is world market leader in turnout technol-
ogy, special rails, tool steel, and special sec-
tions. With nearly 50,000 employees at more
than 500 companies and locations in more
than 50 countries around the world, the
Group reported EUR 11.2 billion of revenues
at a profitability of almost 14% (EBITDA) in
the last business year. According to our 2020
strategy, we aim at long term international
growth and are constantly searching for
new opportunities to establish sustainable
business models. With a clear focus on the
customer segments mobility and energy and
on non-European growth markets, we are
significantly investing in the expansion and
erection of new plants particularly in North
America and Asia. In addition to recent
installations of new facilities in the USA,
further significant investment is also being
made in China, where we just opened a new
automotive parts plant in October, 2015
and will commission two more this year.
The current construction of a EUR 550 mil-
lion direct reduction plant in Texas, which
will produce two million tonnes of HBI (hot
briquetted iron) per year from 2016, is the
largest foreign investment made by the
Group, or any Austrian company in the USA
to date.
Q: Since you were appointed as Chairman
of the Management Board and headed the
Group’s steel division in 2004, the Group
has almost tripled its revenue and developed
from a traditional European steel-producing
company to a technology and capital goods
group. Your company
survived the European
fiscal crisis and made
a series of innovations
with high growth. How
was the transformation
and innovation with
growth possible?
A: Following the motto
“Not more steel, but
making more out of
steel,” we started to
implement a downstream strategy almost
15 years ago, which has proven to be the
absolutely right step in securing long term
growth and profitability in a rather fast
changing market environment. Especially
compared with the merger- and takeover-
manner of the European steel industry in
these days it has proven to be the more suc-
cessful strategic alternative in the long run.
By driving forward acquisitions and invest-
ments designed to consistently extend the
We started to implement a
downstream strategy almost
15 years ago, which has
proven to be the absolutely
right step in securing long
term growth and profitability
in a rather fast changing
market environment.
The New Normal Era and
How to Survive It
I N T E R V I E W
with worldsteel Chairman
Dr. Wolfgang Eder
Chairman and CEO of voestalpine AG, Chairman of worldsteel
Wolfgang Eder, 63, has been Chairman of the Management Board of
voestalpine since 2004. Under his leadership, the Group almost tripled its
revenue from around EUR 4 billion to more than EUR 11 billion and developed
from a traditional European steel-producing company to a technology and capital
goods group that operates globally and enjoys above average profitability.
Mr.Eder took over the office of worldsteel Chairman for a second term in
October 2015—the first time in the 50-year history of the organization that an
incumbent Chairman was reelected. worldsteel is the second largest
industry association worldwide, which has around 170 association
members, representing 85% of global steel production. He was
also President of the European Steel Association EUROFER from
October 2009 to May 2014.
The New Normal Era and How to Survive It
3. Vol.01 January 2016 1918 Asian Steel Watch
value chain we have successfully transformed
from being a ‘classic’ steel company to one of
the global technology and innovation leaders
in processing steel into downstream prod-
ucts. A further major reason for voestalpine’s
achievements is the broad-based positioning
of the Group, both geographically as well as
with regard to its sectoral activities. But it is
especially the unique combination of steel
production and processing that provides
the company with a comparatively crisis-
resistant value chain; the processing of other
materials, such as aluminium or titanium,
which is growing fastly,
additionally differenti-
ates the Group from its
competitors. The 100%
takeover of special steel
specialist BÖHLER-
UDDEHOLM AG in
2007/2008 marked a
major step on our path
of increasing specializa-
tion. Today traditional
steel products, although
exclusively in the high-
quality sector, only account for around a
third of our product portfolio. The remaining
two-thirds involve end-products for sophisti-
cated industries such as automotive, railway
infrastructure, aviation, oil and gas, and me-
chanical engineering. The uncompromising
implementation of the downstream strategy
has also led voestalpine to depart from the
classic earnings mechanisms of the steel
industry in favor of both higher and more
stable margins in demanding customer seg-
ments. It is not least thanks to this position
that we have succeeded in staying on a solid
profit level even under the difficult market
conditions European steel makers are cur-
rently facing.
Q: It is well known that voestalpine is the
leader of technologies in steelmaking and re-
lated products. What is the secret to leading
technologies in steel and related products?
What technology do you think will lead steel-
consuming manufacturing and how will it
influence the steel industry?
A: Innovation has always been the main
driver of voestalpine’s growth and techno-
logical leadership. With a record-breaking
R&D budget of EUR 141 million in the
current bussiness year and more than 750
employees working in this sector worldwide,
we are Austria’s most research-intensive
company. We are convinced that consistent
investment in this key sector is essential to
ensure our future as an international player
in sophisticated product segments and re-
tain technological competitiveness—or bet-
ter leadership. What sets us apart from most
of our competitors in terms of research ac-
tivities is the close cooperation of the R&D,
manufacturing, quality control, mainte-
nance, and sales departments at voestalpine.
Other companies in our sector often run
research centers that operate fairly isolated,
whereas project teams at voestalpine, con-
sisting of researchers, technicians, and sales
people work closely together from the begin-
ning of a project. Basis for our innovative
potential is also a comprehensive knowledge
network comprised of numerous different
cooperations and affiliations with national
and international universities and research
institutions, as well as a number of develop-
ment partnerships with key customers. I
believe it’s our customers’ ever-increasing
demands that will keep setting the pace in
steel-consuming manufacturing. In particu-
lar, I’m thinking of solutions for mobility,
such as lightweight and ultra-high strength
steels for the automotive sector, extremely
resilient, durable high-tech rails or high-
speed switches for railway infrastructure, or
high-strength special steels and nickel-base
alloys for future airplanes.
Q: It is generally accepted that the steel in-
dustry has already entered the new normal
era. What do you think the new normal is
in the steel industry? How do you see the
Asian steel market and Asian steelmakers
facing the new normal? How are you and
your company prepared for the new normal
era and the future? What will you suggest
steel companies to cope with the new nor-
mal era?
A: After the booming years of the last two
decades, it is part of a natural develop-
ment that economies in Asia have reached
a certain level of maturity at which growth
rates are going down—not because of weak-
ness but as a consequence of mathematics.
A higher standard of living means a lower
growth in percentage terms; in absolute fig-
ures, it could even be higher. As a result of
this “coming of age,” demand in those coun-
tries is becoming less commodity-driven and
increasingly shifting from mass to high-tech
products. This offers of course new business
opportunities also for international produc-
ers such as voestalpine. Therefore, we keep
strengthening our presence on the Asian
market, where the applications of our tech-
nologies are steadily progressing in sophisti-
Innovation has always
been the main driver of
voestalpine’s growth and
technological leadership.
voestalpine plant in
Linz, Austria
The New Normal Era and How to Survive ItI N T E R V I E W
4. Vol.01 January 2016 1918 Asian Steel Watch
value chain we have successfully transformed
from being a ‘classic’ steel company to one of
the global technology and innovation leaders
in processing steel into downstream prod-
ucts. A further major reason for voestalpine’s
achievements is the broad-based positioning
of the Group, both geographically as well as
with regard to its sectoral activities. But it is
especially the unique combination of steel
production and processing that provides
the company with a comparatively crisis-
resistant value chain; the processing of other
materials, such as aluminium or titanium,
which is growing fastly,
additionally differenti-
ates the Group from its
competitors. The 100%
takeover of special steel
specialist BÖHLER-
UDDEHOLM AG in
2007/2008 marked a
major step on our path
of increasing specializa-
tion. Today traditional
steel products, although
exclusively in the high-
quality sector, only account for around a
third of our product portfolio. The remaining
two-thirds involve end-products for sophisti-
cated industries such as automotive, railway
infrastructure, aviation, oil and gas, and me-
chanical engineering. The uncompromising
implementation of the downstream strategy
has also led voestalpine to depart from the
classic earnings mechanisms of the steel
industry in favor of both higher and more
stable margins in demanding customer seg-
ments. It is not least thanks to this position
that we have succeeded in staying on a solid
profit level even under the difficult market
conditions European steel makers are cur-
rently facing.
Q: It is well known that voestalpine is the
leader of technologies in steelmaking and re-
lated products. What is the secret to leading
technologies in steel and related products?
What technology do you think will lead steel-
consuming manufacturing and how will it
influence the steel industry?
A: Innovation has always been the main
driver of voestalpine’s growth and techno-
logical leadership. With a record-breaking
R&D budget of EUR 141 million in the
current bussiness year and more than 750
employees working in this sector worldwide,
we are Austria’s most research-intensive
company. We are convinced that consistent
investment in this key sector is essential to
ensure our future as an international player
in sophisticated product segments and re-
tain technological competitiveness—or bet-
ter leadership. What sets us apart from most
of our competitors in terms of research ac-
tivities is the close cooperation of the R&D,
manufacturing, quality control, mainte-
nance, and sales departments at voestalpine.
Other companies in our sector often run
research centers that operate fairly isolated,
whereas project teams at voestalpine, con-
sisting of researchers, technicians, and sales
people work closely together from the begin-
ning of a project. Basis for our innovative
potential is also a comprehensive knowledge
network comprised of numerous different
cooperations and affiliations with national
and international universities and research
institutions, as well as a number of develop-
ment partnerships with key customers. I
believe it’s our customers’ ever-increasing
demands that will keep setting the pace in
steel-consuming manufacturing. In particu-
lar, I’m thinking of solutions for mobility,
such as lightweight and ultra-high strength
steels for the automotive sector, extremely
resilient, durable high-tech rails or high-
speed switches for railway infrastructure, or
high-strength special steels and nickel-base
alloys for future airplanes.
Q: It is generally accepted that the steel in-
dustry has already entered the new normal
era. What do you think the new normal is
in the steel industry? How do you see the
Asian steel market and Asian steelmakers
facing the new normal? How are you and
your company prepared for the new normal
era and the future? What will you suggest
steel companies to cope with the new nor-
mal era?
A: After the booming years of the last two
decades, it is part of a natural develop-
ment that economies in Asia have reached
a certain level of maturity at which growth
rates are going down—not because of weak-
ness but as a consequence of mathematics.
A higher standard of living means a lower
growth in percentage terms; in absolute fig-
ures, it could even be higher. As a result of
this “coming of age,” demand in those coun-
tries is becoming less commodity-driven and
increasingly shifting from mass to high-tech
products. This offers of course new business
opportunities also for international produc-
ers such as voestalpine. Therefore, we keep
strengthening our presence on the Asian
market, where the applications of our tech-
nologies are steadily progressing in sophisti-
Innovation has always
been the main driver of
voestalpine’s growth and
technological leadership.
voestalpine plant in
Linz, Austria
The New Normal Era and How to Survive ItI N T E R V I E W
5. Vol.01 January 2016 2120 Asian Steel Watch
cated industrial sectors. Besides the existing
operations, we have several new projects in
the pipeline that will help to further expand
our local presence. As far as Asian steelmak-
ing is concerned, a sustainable solution for
today’s capacities at lower demand levels
clearly needs to be found as quickly as pos-
sible—in the interest of the steel industry
in- and outside Asia. New economic and
technological models will be asked for to be
able to cope with the ‘new normal’ within
and outside the continent.
Q : In what way, will
industry 4.0 transform
the manufacturing and
steel sectors in the new
normal era? Will digital
technology such as IoT,
Big Data, and 3D print-
ing have big impact on
the steel industry and
how? How are you im-
plementing industry 4.0
in voestalpine? What are
the obstacles to the ap-
plication of digital technology in the steel in-
dustry? Will this technology change the core
competence of steelmaking companies?
A: The idea or goal of industry 4.0 is for peo-
ple, IT systems, and machines to commu-
nicate with each other in the future along
the entire process chain. In my opinion, the
new technologies will serve as supporting
instruments to the core competencies of
any type of industrial operations in allowing
production processes to be more efficiently
and more flexibly designed. If implemented
wisely, we will see higher output at higher
quality, reduction of by-products, optimal
use of resources and thus clearly improved
overall production performance. For our
employees, industry 4.0 definitely means
change as well. Automation will forge ahead,
with all its consequences on the work envi-
ronment. But at the end, people will always
be needed in the future—not as much as
machine operators, but as highly qualified
process engineers and controllers.
At voestalpine, industry 4.0 is not a
completely new trend, but a development of
digitalisation that has already been adopted
on several process levels. At the Linz site,
for example, 3D radar technology has been
developed to measure material distribution
and composition in the blast furnaces in real
time. Another example of digital optimiza-
tion is a new continuous casting line featur-
ing optimized automation, resulting in a 5%
increase in productivity. The company also
operates a fully automated storage system
for steel coils in preparation of the process-
ing of automotive parts for the automo-
tive industry, among others. The goal is to
achieve the “smart factory,” which is distin-
guished by adaptability, resource efficiency,
and ergonomic design as well as by the inte-
gration of customers and business partners
in business and value creation processes. In
the long run, industry 4.0 for us means not
to think about the production in stages any-
more, but to view it as a whole, controlled
process throughout the entire value chain—
from the mine to the car.
Q: Congratulations that you are reelected
as Chairman of worldsteel Association! As
Chairman, what do you think the current key
issues of the global steel industry are and
how will you address the issues with world-
steel Association?
A: Thank you, this surely is an honor. It is
also a distinction for our company and a
mandate to consistently continue the suc-
cessful collaboration of worldsteel members
within the association in a challenging time.
Together with my colleagues in the steel
companies worldwide and at worldsteel, we
will mainly concentrate on three issues: the
challenges of the steel industry within the
scope of global climate protection efforts,
the long-term image transformation of the
steel products, and the assessment and
implementation of the life cycle of steel as a
convincing, positive criterion that separates
it from all other materials. We also see world-
steel in an active, supporting role through a
permanent sharing of expertise and techno-
logical cooperation in the area of energy and
climate policy. Further enhancing the image
of the steel industry internationally as such
is also seen as an important goal. We want
to prominently show that in recent years we
have transformed ourselves to an industry
segment that has become technologically
very sophisticated. Completely new steel
grades show high competitiveness in many
areas of application compared to alternative
materials. We also want to give the public a
better understanding of the entire life cycle
of steel—from development and raw materi-
als to the finished product, and finally to its
recycling. That is only possible with steel—
proving once more that it is clearly the most
environment-friendly material of all and
therefore the perfect basis for our future.
We will see higher output
at higher quality, reduction
of by-products, optimal
use of resources and thus
clearly improved overall
production performance.
Ultra long rails
produced by
voestalpine
I N T E R V I E W The New Normal Era and How to Survive It
6. Vol.01 January 2016 2120 Asian Steel Watch
cated industrial sectors. Besides the existing
operations, we have several new projects in
the pipeline that will help to further expand
our local presence. As far as Asian steelmak-
ing is concerned, a sustainable solution for
today’s capacities at lower demand levels
clearly needs to be found as quickly as pos-
sible—in the interest of the steel industry
in- and outside Asia. New economic and
technological models will be asked for to be
able to cope with the ‘new normal’ within
and outside the continent.
Q : In what way, will
industry 4.0 transform
the manufacturing and
steel sectors in the new
normal era? Will digital
technology such as IoT,
Big Data, and 3D print-
ing have big impact on
the steel industry and
how? How are you im-
plementing industry 4.0
in voestalpine? What are
the obstacles to the ap-
plication of digital technology in the steel in-
dustry? Will this technology change the core
competence of steelmaking companies?
A: The idea or goal of industry 4.0 is for peo-
ple, IT systems, and machines to commu-
nicate with each other in the future along
the entire process chain. In my opinion, the
new technologies will serve as supporting
instruments to the core competencies of
any type of industrial operations in allowing
production processes to be more efficiently
and more flexibly designed. If implemented
wisely, we will see higher output at higher
quality, reduction of by-products, optimal
use of resources and thus clearly improved
overall production performance. For our
employees, industry 4.0 definitely means
change as well. Automation will forge ahead,
with all its consequences on the work envi-
ronment. But at the end, people will always
be needed in the future—not as much as
machine operators, but as highly qualified
process engineers and controllers.
At voestalpine, industry 4.0 is not a
completely new trend, but a development of
digitalisation that has already been adopted
on several process levels. At the Linz site,
for example, 3D radar technology has been
developed to measure material distribution
and composition in the blast furnaces in real
time. Another example of digital optimiza-
tion is a new continuous casting line featur-
ing optimized automation, resulting in a 5%
increase in productivity. The company also
operates a fully automated storage system
for steel coils in preparation of the process-
ing of automotive parts for the automo-
tive industry, among others. The goal is to
achieve the “smart factory,” which is distin-
guished by adaptability, resource efficiency,
and ergonomic design as well as by the inte-
gration of customers and business partners
in business and value creation processes. In
the long run, industry 4.0 for us means not
to think about the production in stages any-
more, but to view it as a whole, controlled
process throughout the entire value chain—
from the mine to the car.
Q: Congratulations that you are reelected
as Chairman of worldsteel Association! As
Chairman, what do you think the current key
issues of the global steel industry are and
how will you address the issues with world-
steel Association?
A: Thank you, this surely is an honor. It is
also a distinction for our company and a
mandate to consistently continue the suc-
cessful collaboration of worldsteel members
within the association in a challenging time.
Together with my colleagues in the steel
companies worldwide and at worldsteel, we
will mainly concentrate on three issues: the
challenges of the steel industry within the
scope of global climate protection efforts,
the long-term image transformation of the
steel products, and the assessment and
implementation of the life cycle of steel as a
convincing, positive criterion that separates
it from all other materials. We also see world-
steel in an active, supporting role through a
permanent sharing of expertise and techno-
logical cooperation in the area of energy and
climate policy. Further enhancing the image
of the steel industry internationally as such
is also seen as an important goal. We want
to prominently show that in recent years we
have transformed ourselves to an industry
segment that has become technologically
very sophisticated. Completely new steel
grades show high competitiveness in many
areas of application compared to alternative
materials. We also want to give the public a
better understanding of the entire life cycle
of steel—from development and raw materi-
als to the finished product, and finally to its
recycling. That is only possible with steel—
proving once more that it is clearly the most
environment-friendly material of all and
therefore the perfect basis for our future.
We will see higher output
at higher quality, reduction
of by-products, optimal
use of resources and thus
clearly improved overall
production performance.
Ultra long rails
produced by
voestalpine
I N T E R V I E W The New Normal Era and How to Survive It