Annual report 2017
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year

Innovative steel for a better engineered future

Highlights from our operations

Sales volume

783

KTON
Revenue

921

EURm
Green Clean Steel

80%

lower CO2 footprint than global average
Represented in

30

countries

3,040

employees
Safety at work

5.2

LTIFR

CEO STATEMENT

A year focused on ramping ­up

We ended 2017 in a better position than in a long time, with lower structural costs, new business, increased market shares, higher demand and an updated strategy in place that will continue to create growth for Ovako. This year we also developed our offering and launched an entirely new steel family, Hybrid Steel, ideal for demanding applications. We possess cutting-edge expertise at producing ultra clean steel, and in helping our customers develop their offerings so that they can provide smarter, more resource-efficient and more climate-smart products to their customers. Put together with lower costs, new business and a generally stronger market, the outlook for Ovako in upcoming years looks very strong.

MARCUS HEDBLOM, PRESIDENT AND CEO

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Operations

Ovako’s focus in recent years has been on safety, greater competitiveness and generating new business. Our situation with regard to volumes and financial position is now improved and we drafted an updated strategy during the year with the aim to take Ovako to the next level.

We will continuously implement improvements to optimize operations. Trough clear segment strategies and our high quality brands we will continue to grow in our areas of outstanding performance. At the same time, we will lay a strong platform for the future, with ongoing development of our offering and our products. Our strong product position is a solid foundation for continued growth

Strategy for continued growth

As a leading provider of the highest quality engineering steel, customers around the world depend on Ovako for a high degree of operational reliability and efficiency. Ovako’s offering along with its high level of expertise makes it possible to deliver steel that gives the customers real competitive edge. Production is based on recycled scrap and comprises steel bars, tubes, rings and pre-components.

Ovako’s steel solutions are used in a broad array of products and production processes in many different industries. With geographical presence in Europe, North America and Asia and a steel product line that includes niche products and customized solutions, Ovako is helping create value for its customers and their customers.

Business and offering

Demand for sustainable products is rising alongside increased customer awareness. The trend is moving toward a more circular economy, with  materials reused in a cycle. Steel is highly suitable for recycling because its properties remain equally good no matter how many times it is reused. Ovako is one of the largest recycler of steel scrap in the Nordics and is engaged in sustainable business across the entire supply chain. The company is a leader in sustainability and minimization of carbon emissions per metric ton of finished hot rolled steel products, with the entire supply chain taken into account.

Ovako manufactures clean, strong and sustainable steel. The production process is based on scrap and a low-carbon electricity mix. As a result, the carbon footprint of Ovako’s steel products is a full 80 percent lower than the global average. During the production process Ovako also minimizes impurities in the steel, making it clean and strong. This gives the steel high-quality properties that enable customers to create lighter, stronger, more durable end products.

Green Clean Steel

Employees

Safety as the number one priority

Creating a culture in which safety is prioritized in all situations is a key aspect for Ovako. The company has been running the group-wide Safety at Work program since 2015, which aims to integrate safety practices into daily operations. As a result of the safety work, the number of lost time injuries has been cut by more than half in the past five years.

 

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Applications

In the world of rallycross racing, every kilo counts. Leading teams depend on lighter, stronger transmission components to gain a crucial competitive edge. For Mats Karlsson, founder and lead engineer at Unic Transmissions, IQ-Steel® from Ovako has helped to achieve just this.

As a supplier to several World Championship rallycross teams, few understand the advantages of Ovako clean steel like Mats Karlsson. For more than a decade, Unic has leveraged the superior material properties of clean steel to contribute to the world’s top competitors, including two recent world champions.

“Simply put, I try to eliminate all possible weight, especially in the rotating parts where the weight becomes double the strain. IQ-Steel enables a lighter, stronger, more compact transmission design and the reduced weight improves performance. I prioritize larger parts where there are more weight savings to gain, such as large gears, and also parts that rotate at high speeds since even small weight savings make a big difference.” 

Mats Karlsson Founder and Lead Engineer, Unic Transmissions

20%

weight reduction is possible on some components by using IQ-steel in combination with an optimal design

World-class performance, lightweight design

Ovako’s steel production generates significant amounts of residuals. As a driving force in the circular economy, Ovako conducts extensive development work to ensure these are used where they bring the most benefit to society.

Together with the asphalt industry, Ovako has found an almost optimal application for one of the company’s by-products. Electric arc furnace slag from Ovako’s steel production is used as aggregate in what is known as slag asphalt. This product has unique properties that help to lower maintenance costs and extend service life. The asphalt is used to increase the wear resistance and durability of paving at roundabout, traffic lights, in industrial areas, and in other areas with a high level of heavy traffic.

A pilot project was carried out in 2007 on a heavily laden crossing at Ovako’s facility in Hofors. Prior to the application of slag asphalt the wear was so substantial that the surface had to be repaired every year, but since the new type of asphalt came into use there has been no need for repair since 2007. As a consequence, Ovako’s slag is now used for large quantities of asphalt through ongoing partnerships.

Strong roads with by-products

Hybrid Steel®, a new and innovative steel family that challenges traditional steel categories, was launched in the fall of 2017. A new alloying strategy is used to create a steel with triple the tensile strength of conventional steel at elevated temperatures.

Final tempering is done at relatively low temperatures and there is very low distortion after heat treatment. This makes it possible for manufacturers to substantially lower the cost of production steps or eliminate them entirely. For example, a component can be machined to its final dimension in a softer condition, followed by a simple heat treatment process to achieve full strength, which reduces complexity and costs.

The steel family is also weldable and has good corrosion resistance. With its high fatigue strength, Hybrid Steel® is ideal for a wide range of high-load applications, such as engine components, bearings and tools for various purposes.

3X

the yield and tensile strength at temperatures up to 500°C, compared to conventional steel

Hybrid Steel® – Steel for the future

Sustainability

Focus on a sustainable business

Sustainability is integrated into every aspect of Ovako’s operations. Production based on recycled steel scrap , an energy mix with a smaller carbon footprint and energy-efficient production processes results in some of the most sustainable steel products in the world.

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