DanSteel sets the standard

DanSteel, located in Frederiksvaerk, Denmark, is a leading producer of steel plate products for a number of industry areas in Europe.

Formed in 2002, and built on the site of the Danish Steel Works that had worked at the location since the 1940s, the company is a relatively new venture. The facility is less than an hour away from Copenhagen, and is positioned closely to both a reservoir and the sea. The production site consists of a rolling mill, and a range of services including shot blasting, priming, marking, testing and plasma cutting.

DanSteel is fully owned by NLMK International BV, itself a subsidiary of the Russian steel magnate OJSC Novolipetsk Steel. The facility receives most all of its raw steel slabs from Russia, and has a yearly steel production rate of 500,000 tonnes. Transported from Lipetsk, 500 kilometres away from Moscow, high quality steel slabs arrive at regular weekly intervals at DanSteel’s port facilities. The company’s logistics network allows the swift treatment of slabs to create steel plates, primarily for companies in the shipyard and windmill turbine production industries.

In 2006, 23 per cent of the plates produced at the factory were distributed to Danish customers, with 71 per cent being exported to the rest of the European Union, and the final six per cent delivered to several other nations. With an annual turnover now reaching around three billion Danish kroner, DanSteel is entering its second period of investment, with the emphasis on modernising and automating its production processes and facilities. The site produces three main steel plate grades: structural steel, shipbuilding steel, and steel used in boilers and pressure vessels. According to the exact specifications of clients, the plates can be hot-rolled, thermomechanically rolled, or normalised.

In 2005, a new standard was introduced within the steel production industry, which all of DanSteel’s plates now attain. According to EN 10025-1, all hot-rolled structural steel must incorporate CE marking on products, in line with the Construction Products Directive (CPD). This standard became mandatory in September 2006, and has become a central practice for the company at the Frederiksvaerk site. Alongside this development, DanSteel can offer customers a number of finishing services, most notably shot blasting and priming. These processes protect steel against corrosion from elements in the air, as well as increasing the life-span of a steel product. Priming gives the shot blasted steel a protective coat of paint primer to further decrease any additional environmental damage.

Igor Sarkits became managing director of DanSteel on the 1st July 2006, having previously worked at the company as a technical consultant in the area of heavy plate production and technological development of the mill. He begins by outlining the current direction of the business: “DanSteel is a producer and modifier of steel plate products. Primarily, our raw materials come from our Russian parent company Novolipetsk Steel, as well as other Russian and Ukrainian suppliers. We apply rolling technology, as well as many other machining competencies. Our facility is in a very good location in regards to transportation logistics, in both the receiving of slabs, and exporting the finished plates. We have rail access, as well as nearby major roads for trucks, and we also have our own seaport.

“The company began under the DanSteel name at the end of 2002, and all of the previous facilities and equipment that was inherited from our predecessors that we did not need was sold off,” Igor continues. “We kept the steel plate mill, as these are the most important pieces of machinery for our business. Our Russian owners are one of the biggest steel producers in the market, so we must be ready to meet the demands of their consistent supply of steel. When the business first began, we worked on developing a plan of product expansion up until this year; since then, we have formulated the second phase to be completed in 2012.”

Igor comments on the direction this next investment projects will take: “We are approaching this period of growth in largely the same manner as we did with the previous phase, in regards to investment into the management of resources and time. We are now planning to upgrade our equipment, most notably purchasing a new normalisation furnace and a levelling machine. In early December, DanSteel also opened a new service centre, and now we are focusing on creating an automated slab yard. Today, some of our processes are still completed by hand, but we are planning to fully automate our production facilities in the future. This operation will be fully operational in April 2008. Alongside the new service centre, we are also planning to develop a new heavy plate production centre.”

Igor explains the main market areas that DanSteel concentrates on: “Our main customers are shipbuilders, and windmill turbine producers, each sharing about 35 per cent of the steel plate products we manufacture. Most of the shipyards that we work with are located in Germany, and we hold 25 per cent of the market area in this country. In the windmill sector, we work with German, Danish, and Norwegian companies, and the majority of our focus is on Northern Europe. We put our attention on developing our services for these two main product areas, to meet the requirements and needs of our customers. We are working with denser levels of steel, which have increased strength advantages, as well as extending our normalisation capacity. We also redeveloped our rolling stamp mill capabilities over the summer. This includes the introduction of a new control system, as well as a new thickness measurement device, to be installed in March of this year.

“In total, the modernisation process will cost approximately 450 million Danish kroner,” Igor states. “This is obviously a very significant period of investment for DanSteel. Other than the mechanical process, we have invested heavily in our environmental practices. DanSteel’s location in Frederiksvaerk has encouraged the company to focus on its effect on the local environment, and we have also concentrated on reducing the noise levels of our facilities. Over the years, we have managed to completely reduce our smoke emissions as well, so this is no longer a factor.”

While the company focuses on offering its customers the highest quality and value for money, it is also committed to continually improving the plant and its processes in regards to its impact on the environment. The energy consumption within the facility is monitored, and all employees in production are educated in the importance of optimised production processes. This has resulted in DanSteel concluding an agreement with Energistyrelsen, Denmark’s state energy agency, to ensure continual energy efficiency enhancement programmes.

Approaching the industry in this way has obvious advantages, as Igor explains: “The company has managed to minimise its gas consumption recently, as this is a particularly expensive resource in our processes. This in turn has reduced production costs, and we have decreased our gas consumption in the process of reheating slabs by approximately seven per cent. We are also working on a new reheating furnace project, which aims at increasing the range of rolling services that we can offer our customers. The emphasis in the future will be on producing wider and heavier steel plates.”

In regards to growth over the last year, DanSteel is in a healthy position. Igor comments: “Our turnover for 2007 was close to three billion kroner, and I hope that the market will encourage a comparable figure in 2008. Last year, our turnover was at the highest it had ever been for the company, and we produced about 520,000 tonnes of plated steel. This is an increase of 20,000 tonnes of steel over our previous record. We will continue to work closely with our main customers, to develop mutually in the direction they are going in.”

However, Igor is also weary of the challenges that may face the company in the future, particularly from business in the Far East: “The main problem that DanSteel will face is the cheap exporting of steel from emerging markets such as China, and this is something that we will have to address. DanSteel is a relatively small company
within the steel production industry, and the benefits of this are the speed and rapidity of our response to meeting customers’ demands. Our main strategy is to focus on the quality of our transportation logistics and to offer our customers efficient, integrated mill solutions. We must make sure the link between the service centre and the rolling mill is efficient, and can respond quickly. Our role as steel producer must be to communicate with the service centre to ensure the quality of our joint role as an integrated mill. As we have our own port, rail, and road links, we must ensure our distribution network is maintained to the high standards we have achieved up until this point,” he concludes.


Products: Steel plates
Sites: Frederiksvaerk, Denmark
Employees: 400