Site visit 2017 – Genk plant June 7 th , 2017 Bernard Hallemans – Chief Operating Officer Europe Gert Heylen – Head of Genk Plant 1
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Site visit 2017 – Genk plant Aperam Operations Europe
Aperam Operations Europe Material flows between Stainless Europe plants in Europe Production flow of Aperam Stainless & Electrical division in Europe (excluding Precision) Steel plant C Cold Rolling Scraps GENK Mill GENK Final U Products Coils S T Cold Rolling Coils Ferro Hot rolling mill alloys Slabs O Mill Châtelet Final ISBERGUES Products M E Coils Final Cold Rolling R Products Mill Steel plant Scraps S Châtelet Slabs/Coils GUEUGNON Full ownership of the entire flow of the stainless steel production 4
Aperam Operations Europe 3 years of active restructuring for a footprint best in class Focusing Capex on the most efficient tools From 29 to 17 tools by focusing on the most efficient tools and using swing tools to manage demand variation and investing “a state of the art” HAP line in Gueugnon GENK ISBERGUES GUEUGNON GENK ISBERGUES GUEUGNON HA&P HA&P HAP HAP HAP RD 79 RD 79 lines 3 3 lines 3 CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR mills CR mills 4 2 3 1 2 2 3 4 5 6 4 2 3 3 4 5 6 LC2I LC2I CA&P/ CA&P/ CAP CAP CAP CAP CAP BA BA BA CAP CAP BA BA BA BAL BAL BA lines 2 BA lines 2 1 2 10 6 8 11 1 10 6 8 11 Skin Skin Skin Skin Skin Skin Skin Skin Skin Skin Skins Skins Skin 2 3 1 2 3 1 3 1 3 1 Core Capital goods, Auto, distrib. & 1 st Decoration trim, heat Markets chemicals & energy exchanges & white goods transformation Suspension Swing Investment Swing Investment Good loading of most efficient assets benefiting from well-advanced restructuring 5
Site visit 2017 – Genk plant Aperam Genk
Aperam Genk Genk: One site, two plants located in the heart of Europe European stainless steel industry footprint Genk plant Cold rolling plant Outokumpu Aperam Steel plant Terni Acerinox Steel making Finishing line Ideally located at 2h drive from German Ruhr area - Europe’s best customer market & scrap generation areas 7
Aperam Genk From scrap to finished product Melting Refining Cont. Casting Grinding Steel plant Genk Hot rolling mill Châtelet Cold rolling plant ( ) Genk First A&P Cold Rolling Final A (&P) Finishing (excl. SSC Benelux) With Châtelet HRM, Genk is forming an integrated site to produce stainless steel flat products Finishing synergies have been developed with integrated SSC Benelux nearby the plant 8
Aperam Genk Different worldwide process innovations have been introduced in Genk Steel Plant – casting up to 2m and twin casting Cold Rolling up to 2m at MKW2 Most of the process equipments are at state-of-the-art productivity 9
Aperam Genk Leadership journey, launched in 2011, leads to high rhythm of operational efficiency improvement Labor productivity evolution in Genk Steel Plant and Genk plant line productivity evolution - example Cold Rolling Mill 160% 120% 140% 110% 120% 100% 100% 80% 90% 2011 2012 2013 2014 2015 2016 2017 2014 2015 2016 2017 Ton/act FTE (Ref 2011) Steel Plant Cold Rolling Mill Operational efficiency (t/day) BUL3 AOD SP CRM BUL3 AOD Labor productivity improves by 5-7% per year, independent Continuous improvement continues, including on equipment of volume and despite more difficult mix (e.g. AOD, BUL3) that is at best-in-class productivity Genk largely contributes to Aperam strategy for competitiveness 10
Aperam Genk An optimal mix between top line and complexity with strong culture of support to the development and growth of top line products Production of the mill Sales evolution of top line products from Genk 170% 160% 150% 140% 130% 120% 110% 100% 2012 2013 2014 2015 2016 Product 1 Product 2 Product 3 Throughput and capacity optimized thanks to the closed Top line product growth is faster than average growth in monitoring of mix and Top Line volumes under the constraint commodities of technical complexity A well balanced portfolio Top line product development in close collaboration between production and sales teams 11
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