The Austrian manufacturer Voestalpine produces stainless steel in a new, highly automated plant in Kapfenberg, for Rolex, among others. The construction reflects the challenges the industry is currently facing: costs are rising, but investment is essential to compete and attract women to the workforce.
Voestalpine already operates a steel mill in Linz.
In many places in Europe, steel mills are seen as a remnant of the past industrial age. Not so in the small town of Kapfenberg in the Austrian state of Styria. A new factory has just been completed there. According to the owner Voestalpine, this is the first new stainless steel plant in Europe for decades. And according to those responsible, it could be just as long before such a factory is built on the old continent again.
The watch manufacturer Rolex as a customer
From this summer, operations in Kapfenberg are to be gradually ramped up. Then Voestalpine, a company with around 50,000 employees, will produce steel there for the aviation, energy and tool construction sectors. A well-known company from Switzerland is also among the customers: The watch manufacturer Rolex obtains steel for watch straps from Kapfenberg.
Kapfenberg also shows how difficult the investment decisions are that companies are currently having to make in view of high inflation. The ground-breaking ceremony on the factory premises took place four years ago. Originally, Voestalpine expected expenses of 350 million euros for the new factory; now the work is likely to cost 10 to 20 percent more than calculated, firstly because of the pandemic, secondly because of general inflation. “If we built today, the plant would be much more expensive, possibly double,” says Franz Rotter, head of the High Performance Metals division.
According to the manager, the question of who should bear the additional costs for the plant leads to difficult discussions with the suppliers. And one can imagine what the rising investment costs could mean for the economy as a whole: If many companies rethink their spending as a result, this would probably significantly reduce growth – but at least also help to dampen inflation.
Stand up to the Chinese competition
However, regardless of the costs, Voestalpine is doomed to invest at the existing location in Kapfenberg. In order to keep up with the competition, such as those from China, productivity in production must be increased, says a manager at the plant. Everything revolves around the performance.
Operations in Kapfenberg are highly automated. Voestalpine employs around 3,000 people in the city and in the neighboring town; however, there are only 150 employees in the actual steel production, and they produce 200,000 tons of the material a year. “Digitization is the only chance to keep capital-intensive industries in Europe,” says manager Rotter.
In Kapfenberg, for example, the company also needs employees who are willing to work in shifts. But such employees are difficult to get, even the labor market in Central Europe has dried up.
women instead of muscle men
Digitization should therefore also help to attract more women to work in a steel mill. In the past, almost only muscular men in protective clothing worked there; today, a large part of production is controlled via information technology.