Avesta Sheffield announces SEK 315 million investment to enhance cold rolling capacity

Avesta Sheffield announces SEK 315 million investment to enhance cold rolling capacity "Faced with strong markets in the next few years, Avesta Sheffield's priority is to carry out investment schemes that release bottlenecks and raise capacity quickly at a relatively low cost," says Avesta Sheffield's CEO, Stuart Pettifor. "These schemes must also clearly improve product value and customer service. Our policy will mean a series of smaller-scale investments rather than one large, expensive, scheme to raise capacity, which is unlikely to add shareholder value." In order to respond to the increasing demand for thinner gauge cold rolled stainless steel, Avesta Sheffield is to invest a total of SEK 315 million at its facilities in Nyby (Torshälla) and Sheffield. The investments will speed up existing process routes and enhance the Group's capacity for thinner gauges of stainless steel. Earlier in the autumn, a decision was taken to invest SEK 112 million in the Avesta melt shop. These cold rolled investments will speed up process routes and enhance the Group's rolling capacity for thinner gauges of stainless steel. The long-term growth in stainless demand in Europe is around 4-5 per cent per year. Around 30 per cent of this growth can be attributed to material in gauges thinner than 1 mm. This market segment is expected to grow at a faster rate. For further information, please contact: Lars-Göran Jöbo, Business Area Manager, Coil Products Nyby, tel: +46 (0)16 492 83, John Newborn, Business Area Manager, Coil Products Sheffield, tel: +44 (0)114 261 42 67. Press information * In August 1998, Avesta Sheffield decided to set up a new organisation and implement a five-stage plan of action, referred to as the Cornerstone strategy. Two important stages of this plan included a new market-oriented organisation and an extensive cost-cutting programme. * Stage three involves raising levels of customer service in the form of improved delivery reliability, optimum lead times and product quality. One aspect of this is the use of Internet-based systems for communicating with customers. Through vertical integration within the Business Areas, the Group is creating products with a higher degree of added value and improving customer focus. The acquisition of Lee Steel Strip in November was an example of the strategy to add value. * The fourth stage of the Cornerstone strategy involves a number of relatively small-scale investments aimed at releasing production bottlenecks and increasing the yield of existing facilities. A total of SEK 315 million will be invested in the facilities in Nyby (Torshälla) and Sheffield. * Sheffield: To release bottlenecks in production, the no. 1 annealing and pickling line at the cold rolling mill and the finishing equipment at the Trade Centre in Sheffield will undergo improvement in order to enhance capacity by approximately 30,000 tonnes, or 10 per cent. The cost of this investment is estimated at SEK 81 million. The planned completion date for the capacity expansion programme is December 2000. * In connection with this, the existing rolling, annealing & pickling and finishing equipment in Sheffield, will be enhanced to increase the output for cold rolling material in gauges thinner than 1 mm. It is estimated that this investment will cost SEK 86 million and be partly completed in August and finished in December 2000. * Nyby (Torshälla): In Nyby, the no. 55 annealing and pickling line will undergo improvement in order to increase rolling speeds and make it possible to roll coils in widths of up to 1.5 m down to extremely thin gauges, as low as 0.40 mm. A new coil slitter will also be installed at the Nyby site for slitting wide coils to narrower strips. The cost of these investments is estimated at SEK 148 million and the planned completion date is October 2001. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/12/03/19991203BIT00090/bit0001.doc http://www.bit.se/bitonline/1999/12/03/19991203BIT00090/bit0002.pdf