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Siemens Improves its Profile for Metallurgical Plant Construction by Expanding its Range of Services


Siemens is improving its profile for metallurgical plant construction by expanding its worldwide range of support and modernization services. “Improving the performance of plants with the aim of higher productivity will greatly help to satisfy the steadily rising demand for steel products throughout the world”, said Dr. Richard Pfeiffer, head of worldwide business for Metals Technologies in the Siemens Industrial Solutions and Services Group (I&S). The construction of new plants planned for the next few years, above all in China, India, Russia and Brazil, will only help to cover part of this growing demand, he continued. In the U.S. and Europe, production increases will be achieved by modernization of existing installations. Siemens is supporting this trend with its life-cycle maintenance services. “We will expand our portfolio accordingly and thus strengthen our leading position”, said Pfeiffer. Within the next few years, this segment is to account for one third of the total sales of Siemens Metals Technologies.

With plant and process solutions plus matching products and life-cycle services, Siemens can provide everything that is needed to optimize the entire production chain in the iron and steel industry - from ore extraction to rolling and treatment of steel sheeting for the automotive industry. “In the medium term, the number of new plants being built will decrease”, said Pfeiffer. “Siemens is adjusting itself to the fact that, given a plant life-cycle of up to 30 years, the integration of new methods and process technologies in existing plants as well as innovative automation solutions will help companies to meet the globally rising demand for iron and steel even though the number of new plants is actually diminishing.”

With new orders of € 2.6 billion (previous year: € 2.3 billion) and existing orders to the value of € 2.7 billion, the Metals Technologies Division of I&S was able to improve its world leadership position in the market in fiscal 2006 (ended on 30 September). The regions Asia-Pacific and Europe each contributed 30% to total new orders. North and South America together contributed 20% and so did the Middle East and Russia. The reduction in new plant business expected in the next few years is to be compensated for primarily by life-cycle services business, whose share in sales is to double to around one third by 2010. Due to increasing demand in modernization business, the share of electrical products in sales is to be increased considerably to around 30% by the year 2010.

By expanding its services business, Siemens is reacting to the consolidation of steel manufacturers in the world market. “By 2010, the ten largest companies will increase their present share of world steel production from around 28% to around 50% and, in 2015, will amount to a share of approximately two thirds”, forecasts Pfeiffer. “By taking over Voest Alpine Industrieanlagenbau in summer 2005, Siemens expanded its plant project business with automation and electrical engineering solutions by adding mechanical and process solutions to its already existing range of products. This opened up the way to a potential market of € 45 billion. Unlike any other company in the market today, we can provide iron and steel producers with ways of improving their entire value-added chain”, stressed Pfeiffer. “To this end, Metals Technologies is developing innovative processes and plant solutions and, with Siemens, has a network that enables us to provide any company in the world locally with the support services they need.”

In October 2006, after taking over Voest Alpine Industrieanlagenbau, I&S reorganized the Metals Technologies Division, which has 7,500 employees and projects in over 50 different countries. Previously, the two companies had focused on iron & steelmaking and rolling & processing. After merging, they started to be active in open-cast mining business as well. This means that a single company now provides support services for the entire production process – from ore extraction to iron and steel production. The new subdivision called “Metals & Mining Services” is responsible for services and modernization in all segments throughout the world. “This means”, said Pfeiffer “that we are now in a position to offer customers individual solutions based on standard products and systems. Our experience in planning, commissioning and modernizing the world’s largest group of existing industrial installations is simultaneously the best prerequisite for optimizing processes and providing companies with competitive production plants.”

The Siemens Industrial Solutions and Services Group (I&S) is the integrator of systems and solutions for industrial and infrastructure facilities and global service provider for the plant and projects business covering planning, installation, operation and the entire life cycle. I&S uses its own products and systems and process technologies in order to enhance productivity and improve competitiveness of companies in the sectors of metallurgy, water treatment, pulp and paper, oil and gas, marine engineering, open-cast mining, airport logistics, postal automation, intelligent traffic systems and industrial services. In fiscal 2006 (to September 30) I&S employed a total of 36,200 people worldwide and achieved total sales of EUR 8.819 billion, according to U.S. GAAP.

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