Italian ABS Investing 200 Million Euros in Sisak Ironworks

Lauren Simmonds

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As Poslovni Dnevnik/Marija Brnic writes, the once somewhat troublesome Croatian steel plant in Sisak will soon get a large cash injection according to Italian media, which have reported that the executive board of the ABS Group, owned by ABS Sisak, approved the company’s investment programme worth a total of 400 million euros, and part includes the construction of a new iron rolling mill in Sisak.

The Italian company announced that this is a large and revolutionary project, a kind of milestone in the production of steel, which, with the technological breakthrough will be of great importance in the context of energy transition.

Danieli Digital Melter’s new steel melting technology should enable the direct use of renewable energy sources, and according to the announcements, instead of a conventional electric furnace, solar energy will be used by installing 160,000 square metres of solar panels, which will make ABS a leader in green steel production. The Italian metallurgical company, which is owned by the Italian industrial giant, the Danieli Group, revealed that this ambitious project for the Sisak ironworks will be realised over a three year period.

Danieli decided to enter the investment venture of ABS in response to the sharp increase in demand for steel across Europe, and major changes on the global steel market, which began being felt before the war in Ukraine broke out. Following the Russian invasion of neighbouring Ukraine, a complete turnaround and a return of steel production in the EU and the USA took place. Danieli has been encouraging research and development activities for years now, looking more deeply into so-called green steel, through carbon reduction, and even the preparation of the use of hydrogen in production, and over recent years, ABS has invested in the modernisation of its production over one billion euros.

This will not be the first investment in the Sisak ironworks, ie this particular “unit” of ABS, about which the details aren’t yet being revealed when it comes to the specific investment in the new rolling mill.

Davor Sosic, President of the Management Board of ABS Sisak, who took over the management a month ago, pointed out that two years ago, a new innovative digital power system, Q-One, worth 10 million euros, was installed at the Sisak ironworks. Sosic explained that this represented a huge step forward for the Sisak ironworks in general, which is a large consumer of energy, and the existing system has caused difficulties and a decline in the electricity network.

It is a prototype, which will be used by ABS in Italy, whose main effect is not to reduce electricity consumption, but primarily to improve overall system efficiency.

The owner of the Sisak ironworks decided to enter this investment in the midst of the coronavirus crisis, when the steel market slowed down worldwide. Sosic also pointed out that 5.6 million euros were invested in the renovation of the continuous iron casting plant, which was completely obsolete, and this year, the electric arc furnace is being replaced, which is an investment worth more than six million euros.

“We’re continuously trying to raise the technological level of the plant and our goal is to increase our existing annual production,” stated Sosic, adding that it is expected that this level will be exceeded with the new rolling mill. It’s worth noting that the Italian ABS currently produces about 1.2 million tonnes of steel per year, and it is estimated that it will double this production after the new investment is completed.

This new investment venture in the Sisak ironworks should significantly transform production there, as the plants are now producing semi-finished products. After the construction of the new rolling mill is completed, Sisak’s ABS will also sell those finished products, which will be a big step forward in terms of their further business.

The Sisak ironworks is otherwise already achieving constant growth, and operates mainly on foreign markets, from Italy to Turkey and Germany. In the 2019/2020 business year, in the conditions of the global coronavirus pandemic and difficult business for the steel industry on a global level, the total revenues of ABS Sisak were at the level of 114 million kuna, and the following 2020/2021 period, their revenue stood at an impressive 463 million kuna. In the first half of the new business year, more precisely from July to December 2021, which was marked by higher steel prices, their revenues exceeded the entire previous business year, reaching almost half a billion kuna, so it’s only natural that ABS Sisak expects to achieve a record result this year.

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