The governor of Kentucky, Steve Beshear, personally thanked Acerinox after the company announced it will be investing 116 million euros to implement new manufacturing lines in its North American Stainless factory, located in the aforementioned state.
Beshear stated that “this announcement shows that this company continues to trust that we are the ideal place for its operations to succeed. I want to thank NAS for their continued belief in Kentucky and for creating jobs”. He also said that “this is extremely good news for our community and the region, so I want to thank North American Stainless for undertaking yet another major investment”.
Cristóbal Fuentes, president and CEO of NAS, highlighted the fact that “this investment creates an opportunity to grow our sales in the American market,where a significant percentage of this product is currently imported. We appreciate the Governor’s demonstration of support of the men and women of NAS by meeting with the executives of Acerinox S.A. in Spain, as well as when they visited Kentucky.”
(Statements are available on this link: http://kentucky.gov/Pages/Activity-Stream.aspx?viewMode=ViewDetailInNewPage&eventID=%7BD0515309-4543-416F-B52F-3842401FA2B1%7D&activityType=PressRelease)
Kentucky has been recognised as the most attractive state to invest in due to its business climate, the close relationship between companies and government, ease in obtaining permits and processing administrative procedures, competitive energy prices and good infrastructure. Another incentive is its proximity to the main markets for buying scrap metal (a basic raw material in the production of stainless steel) and selling end products.
With this new venture Acerinox aims to increase its range of end products in the US, added BA bright finished steel to its current offer. This great opportunity for project development stems from high annual consumption of this product coupled with the fact that, lacking internal production, most of it must be imported.
Consumption is expected to grow steadily for the next few years, as this type of steel is used in a number of industries, including electrical appliances, cars, chimneys, tanker lorries, cutlery and decoration, among others.
In order to carry out this project, Acerinox will invest 69.7 million euros in building a line of bright annealed steel and 47 million euros developing a new cold roller. Additionally, NAS will have to increase hot rolling production, which it is entirely capable of doing with no effect on the sale of end products derived from hot-rolling.
Consequently, Acerinox will become the main producer of this material on American soil, reducing turnaround time and transport and import costs, as well as offering North American customers more competitive prices. This also entails the possibility of expanding its order book.
Acerinox, the Spanish company leading the American market
Acerinox is one of the few Spanish companies leading the American market in its sector, holding a large part of the country's market quota and unrivalled both in turnover and sales volume.
Moreover, the NAS factory in Kentucky is the most efficient and profitable plant in the world, with a steel production capacity of 1.4 million tonnes. Last year steel production increased by 3.6%, hot rolling by 4.8% and cold rolling by 1.9%. All products manufactured were offloaded and there was still room for growth.
NAS, which has 1,382 employees on its payroll, started from scratch in 1990 as a result of a joint venture with Armco, and was later purchased by Acerinox.
On the other hand, research and development is an important focus, which the factory spent 9.5 million euros on in 2014.
USA, a market with a future
In addition to the United States' good macro-economic results—a 5% growth in GDP during the third quarter of 2014 and an annual growth of 2.4% (as well as the creation of 2.95 million jobs, resulting in an unemployment rate of 5.6%)—consumption of stainless steel also increased by 5% last year, which allowed the NAS factory to obtain record production rates to satisfy the high level of internal demand.
In fact, in global terms, the region with the highest percentage growth in the stainless steel market is America, where consumption grew 14.9%—from 2.45 to 2.81 MM tonnes—from 2013 to 2014.
It is worth adding that the biggest proportion of Acerinox's business turnover comes from America, mostly the US, followed by Europe. Turnover from the Asian market, in turn, is experiencing considerable growth thanks to the investment the company is making in the Bahru Stainless (Malaysia)
NAS, Algeciras, Columbus and Bahru: Acerinox's four factories
Acerinox has four flat-product factories, three of which are vertically integrated: the factory in Acerinox Europa (Spain, 1970), which was the first to surpass the one million tonnes-year milestone (2001); North American Stainless, NAS (Kentucky, U.S., 1990), and finally, Columbus Stainless (Middelburg, South Africa), which became part of the Acerinox Group in 2002. The fourth factory, Bahru Stainless, is currently under development in Johor Bahru (Malaysia).
Acerinox is one the the leading stainless steel manufacturers worldwide in terms of production capacity, nearly reaching 3.5 million tonnes of steel. It is the leading company in stainless steel production and sale in the United States and the third in Europe, with an 18% market share. Additionally, Acerinox is experiencing considerable growth in other markets, such as Asia.