ArcelorMittal South Africa Limited · JSE:ACL
ArcelorMittal South Africa — Investor Presentation (May 2013)
21 slides from ArcelorMittal South Africa's investor presentation, May 31, 2013
Slide 1: ArcelorMittal South Africa: Stabilising operations
ArcelorMittal South Africa Stabilising operations Dr. Hans Ludwig Rosenstock, COO 31 May 2013
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation may contain forward-looking information and statements about ArcelorMittal South Africa and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives
Slide 3: Agenda
Agenda • Stabilize operations • Asset reliability • Quality improvements • Energy savings • Other cost reduction initiatives 2
Slide 4: Management systems implemented to stabilise operations
Management systems implemented to stabilise operations • Decision in 2010 to stabilize and improve operations by introducing management systems Vanderbijlpark, • Systematic approach to deal with business matters, divided into work Vereeniging, streams along defined problem Stabilize solving technolo
Slide 5: Maintenance: Vanderbijlpark Works master plan
Vanderbijlpark Works master plan 2013 2014 AREA Q1 Q2 Q3 Q4 Q1 Q2 Complete SOP audits & Op Stand- ardisation Visual Management • Detailed work plan Management Routines • Best practise Management of Abnormalities implementation CMN (Full ARP implementation) • Leveraging from CMS (Full ARP implementat
Slide 6: World Class Manufacturing (WCM) overview
World Class Manufacturing (WCM) overview • Started program in 2010 with 5 WCM pillars and 5S • Focus on autonomous maintenance to deliver improvement in reliability shifted from achieving high reliability to focused improvement to deliver the savings Savings achieved by Dec 2012 (from baseline H1
Slide 7: Maintenance systems
Maintenance systems Breakdown Life cycle maintenance Condition based maintenance • Repair is performed in maintenance • Equipment is repaired fixed intervals, • Repair is performed after a failure in depending of the according the actual operation estimated life cycle of equipment status • advantage
Slide 8: Vanderbijlpark reliability initiatives: Hot rolling mill
Vanderbijlpark reliability initiatives: Hot rolling mill Hot strip mill and plate mill reliability plan Hot strip mill quality plan • Short loop to tackle the shorter delays • Training of young engineers - overseas experts – Positive outcome employees focus on the wider • Develop proactive tools s
Slide 9: Vanderbijlpark reliability initiatives: Blast furnace area
Vanderbijlpark reliability initiatives: Blast furnace area VDB blast furnace C Zero Wind Equivalent Availability (% of operating time) Key drivers for blast furnace optimization • Blast furnace C hearth wall and tuyere belt 89 92 85 replaced 76 • Blast furnace D tapholes repaired with design improve
Slide 10: Vanderbijlpark reliability initiatives: Strip processing lines
Vanderbijlpark reliability initiatives: Strip processing lines • Significant improvements made in unplanned stoppage rates Galvanizing line Pickling line (hours between stoppages) (hours between stoppages) 20.8 2.27 18.9 17.6 1.89 14.6 1.24 1.29 2011 2012 2013 YTD Target 2011 2012 2013 YTD Target •
Slide 11: Maintenance spend is sufficient
Maintenance spend is sufficient • Maintenance capex plus repairs and maintenance are and will remain sufficient to sustain our competitive position • Decreased expenditure in 2009 due to global financial crisis otherwise overall incremental spend increase each year Maintenance spent on both capex an
Slide 12: Quality improvements - Vanderbijlpark
Quality improvements - Vanderbijlpark • Ongoing quality improvement Vanderbijlpark Works (quality claims by volume for flat steel products) efforts • Customer complaint ratio of 1.08% of total sales revenue in 2012 • Significant reduction achieved • 2013 YTD at 0.52% • 2012 scrapped tons (i.e. scrap
Slide 13: Quality improvements – Saldanha works
Quality improvements – Saldanha works Prime ratio 99.5 • Customer complaint ratio of 0.102% 99.1% 99.0 of total sales revenue in 2012 98.5 • 2013 YTD rate of 0.058% 98.6% 98.0 97.8% • Scrapped tons (ie scrap & 97.5 secondary grade) in 2012 was 97.6% 97.0 6,510t 96.7% 96.5 • 51% lower than 2011 peak
Slide 14: Yield improvements - Newcastle
Yield improvements - Newcastle • In 2012 the bar mill was responsible for 56% of the relevant complaints by volume and the rod mill for 44% • 2013 YTD medium mill yield against target at 94% • 2013 YTD cobble rate of 1.3% at bar mill Newcastle medium mill – yield % Newcastle bar mill – cobble rate %
Slide 15: Energy – fuel rates Vanderbijlpark
Energy – fuel rates Vanderbijlpark Key drivers for the blast furnace VDB blast furnace C - Total fuel rate (coke equivalent) Kg/tHM optimization at Vanderbijlpark 580 • Charging of DRI 565 565 560 565 • Improve stability 560 • Fine sinter charging 540 • Thabazimbi lump on mixing bed 526 529 529 528
Slide 16: Energy – electricity Saldanha works
Energy – electricity Saldanha works 2012 projects (total savings R127m) Saldanha works electricity consumption • Technology Kwh/t HRC • Variable speed drives, waste heat 1.51 utilisation to replace diesel heater, lighting 1.31 1.31 replacement 1.27 1.19 • Operational efficiency • RHF, WTP pump syste
Slide 17: Energy – LPG Saldanha works
Energy – LPG Saldanha works • Reduce LPG consumption by 30% by changing operating philosophy • Use process gas for furnace reheating • Reduce temperature losses by stabilizing the operations Saldanha works LPG consumption 36 25,000 20,625 22,112 28 18,811 18,303 20,000 25 23 24 15,000 13,072 17 12 1
Slide 18: Energy – Newcastle
Energy – Newcastle Newcastle medium mill gas consumption GJ/ton 2.76 • Process review for reheating 2.30 1.78 furnaces • Improvement of measurement technology • Training of operators 2011 2012 2013 YTD • Stabilizing of operations Newcastle bar mill gas consumption GJ/ton 1.28 1.19 1.08 2011 2012 201
Slide 19: Asset optimisation at Vanderbijlpark
Asset optimisation at Vanderbijlpark • Closure of electric arc furnace – Vanderbijlpark has sufficient capacity to meet domestic and AOL demand – Allows the full utilization of the BF route • Closure of caster 3 – Improve productivity of casters V1 and V2 • Closure of coke oven battery 3 – Reduced b
Slide 20: Key messages
Key messages • Comprehensive cost savings • Operational performance enhanced with new management systems implemented • Focus on improving asset reliability • Our assets will continue to receive adequate repair and maintenance to ensure our reliability • Quality is focus area and we are showing posit
Slide 21: Thank you
www.arcelormittalsa.c om Thank you
ArcelorMittal South Africa — Investor Presentation (May 2013) on 6ix