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GRI 2-6
Production characteristics and major assets
The Extruded Product Segment consists of 7 companies, including 5 foreign companies. The Segment avails of four modern production plants located in:
- Kęty, where the parent company of the Segment, i.e. Grupa KĘTY S.A., is registered, covering a press shop, a foundry, dies and tools production workshop, anodising plant, and advanced aluminium products plant;
- Tychy, where Aluform Sp. z o.o. is registered, covering a press shop;
- Slovenska Bistrica (Slovenia), where Aluminium Kety EMMI d.o.o. is registered, covering aluminium components production plant and anodising plant;
- Borodianka (Ukraine), where Alupol LLC is registered, covering a press shop.
The plants possess the total of 14 modern presses of raging from 1,200 to 4,400 tons, out of which ten are used in manufacturing products from soft alloys, and four for products from hard alloys. The total production capacity of the EPS is now roughly 110,000 tons a year, and apart from the extrusion process which is the main activity of the Segment, comprises surface treatment (anodising), welding and prefabrication (cutting, drilling, CNC working). The engineering facilities are supplemented with an in-house foundry, consisting of casting lines of the annual production capacity reaching 50,000 tons a year and adjusted to cast billets with various chemical compositions.
The production capacity of the Segment enables the supply of various branches of industry with aluminium profiles and components, and these include the most progressive ones, such as construction, automotive, transport, railway, electrical engineering, defence, household equipment, advertising, and tourism industries. Grupa KĘTY S.A. is not only the largest press shop in Poland but also an established European brand among the manufacturers of highspeciality aluminium products. It has been manufacturing precise components using varied technologies, in accordance with the individual preferences of our customers, frequently with deliveries directly to the assembly lines of our recipients. Grupa KĘTY has the Advanced Aluminium Products Plant (ZZPA) within its structures. It is a special department responsible for comprehensive preparation of components and their implementation in serial production. The plant possesses facilities for working extruded products, for example CNC working (drilling, bevelling, threading), cutting, trimming, striking, bending, assembly and arc welding. On the area of 7,000 m2 there are available dozens of machines and devices to manufacture components of extruded aluminium profiles. New lines and robots have been systematically installed in response to customer needs and engineering development.
Plant in Kęty
Plant in Slovenia
In the opinion of the Company Management Board, the aluminium processing market in Poland and Europe is highly competitive, which may be partly due to the good prospects of the industry. In Poland, there are 9 press shops with the total of 45 presses and estimated annual production capacity of 400,000 tons, which makes our country one of the leading producers of extruded products in Europe in terms of production capacity. The annual production capacity of the EPS is approximately 110,000 tons, making the Segment the largest manufacturer of aluminium profiles in Poland and one of the largest in Europe. The estimated consumption of aluminium profiles in Europe in 2022 was approximately 3,600,000 tons, including 300,000 tons in Poland.
The main European competitors of EPS include international brands such as Hydro Aluminium, Constellium, Cortizo, Aliplast, Exlabesa and Step-G, as well as domestic manufacturers such as Yawal, Eurometal, Extral Aluminium and Albatros. Recently, there has also been a noticeable expansion into the European market by players from other regions, in particular the Far and Middle East. The companies compete with the European ones mainly by price, and supply relatively simple products, which do not require major processing or complicated logistics.
The aluminium industry in Europe experienced the impact of a number of negative factors in 2022 and remains vulnerable to their repercussions. High energy costs, instability of raw materials prices and exchange rates led to significant, and in many cases abrupt, reductions in demand. The recession hit the construction sector particularly strong. Also the automotive sector demand collapsed and only at the end of the year started to cautiously catch up with orders, after supply chain bottlenecks eased. Over the past two years, the supply chain bottlenecks had been a huge problem holding back the global automotive demand. The energy crisis has also put severe pressure on primary aluminium and billets production in Europe. Due to high electricity prices, the European smelters were reducing or shutting down their production altogether. The European primary aluminium production capacity had been cut by over 50% in the past year.
Amidst violent political and economic turmoil, aluminium prices on the LME reached historic highs in 2022 – USD 4,100 per ton on 7 March. LME aluminium quotations in December were already hovering around USD 2,500 per ton, which meant a drop of roughly 45% since March. The billet premium, which had been climbing strongly since mid 2021, reaching a previously unseen historic high of USD 1,600 per ton in April 2022, at the end of the year dropped to roughly USD 800 per ton.
By way of focused activities with regard to sales policy, as well as development of new technologies and reasonable investments, the Segment generated satisfactory profitability in 2022. Last year, the sales revenue of the Segment grew to PLN 2,451,380,000 (up by 35%). A broad assortment of products and differentiated customer base helped the Company cope in the difficult macroeconomic conditions of 2022. The Segment had effectively managed its resources, i.e. modern production lines, processing capacity, and well prepared foreign sales structure. Similarly as in the recent years, a major factor developing sales in 2022 was supporting export markets, particularly those largest ones for the Segment, as well as maximum utilisation of the potential of foreign trading companies. The sales of products on foreign markets accounted for 45% of the Segment total sales in 2022, in some months reaching the share that exceeded domestic sales.
Additionally, in the slumping market for soft-alloy products (construction and joinery, furniture, tourism), the ability to extrude profiles from hard alloys proved to be a major advantage for the Segment. The fact that hardalloy products manufacturing is much more difficult, and only a few press shops in Europe deal with it, contributed to high-level demand for the products throughout 2022.
The Extruded Products Segment has been selling its products all over Europe and many countries in the world. We supply aluminium profiles and components to various branches of industry, including construction business, automotive and transport, railway, electrical engineering, defence, household equipment, advertising, and tourism industries.
Grupa KĘTY aluminium profiles are used in the construction business for façades, windows and doors, rollershutters and other shading products, as well as HVAC systems. As regards structural applications, aluminium profiles are chosen for parts that contribute to mechanical resistance and stability of buildings, e.g. canopies of industrial halls, station halls and bus stops, sports halls, swimming pool roofs, river bridges, masts, lighting towers.
The aluminium profiles produced by the Segment are also used in the production of parts for passenger cars, including electric cars, public transport means (buses, trains) and modern transport vehicles (semi-trailers, trailers and truck bodies).
Another important industry using the Segment-manufactured aluminium profiles is power engineering, where they are used in the production of lamps, lighting poles, cable ducts, as well as solar panels and wind power plants.
The Aluminium Systems Segment, which produces aluminium building systems (window and door, façade, and sun protection systems), is the largest customer of the EPS, receiving more than 20% of the latter’s output. Other than that, none of the EPS customers accounted for more than 10% of the Segment’s consolidated sales.
The basic semi-product used in aluminium profiles extrusion are aluminium billets (in pure or scrap form) and alloy additions such as silicon, magnesium, manganese, copper, zinc, nickel and others. Approximately 40-45% demand for billets is covered by the in-house foundry production. The other part is purchased by the Segment from external suppliers, mainly in Europe. The main suppliers of aluminium are companies located in the Netherlands and Switzerland. Alloy additions are mostly purchased in Europe and China. The share of none of the raw materials, semi-finished products or materials suppliers exceeds 10% of the total purchases made by the Segment.
The investment and sales activities of the Segment focus on products which require speciality equipment, expert know-how, and compliance with restrictive quality procedures. Such assumed direction supports development and competitive advantage maintenance. A key role in the strategy is played by the in-house Research and Development Centre (CBR), employing professional staff and furnished with modern controls and instrumentation. The CBR is where hundreds of specialised tests are carried out every day to release products for delivery (chemical composition analysis, strength, metallographic and ultrasonic tests, spatial and electrical conductivity measurements). The CBR also collaborates with respected research and development centres in Poland and provides a scientific base for innovative projects carried out by the Segment. In this way, the Segment is steadily expanding its product range, particularly with products used in prestigious high-tech industries. In 2022, the CBR carried out work to support organic growth and efficiency of the Segment production departments.
To support the sales of products, the Segment has focused mainly on the improvement of efficiency of the assets possessed – increased and optimised use of processing capacity by the operated equipment and machinery. Since the beginning of 2022, the Segment has been carrying out its major investment project within the 2025 Strategy, i.e. launch of new production capacity by way of construction of a new hall and installation of two extrusion lines with 20 MN and 40 MN presses. The hall and infrastructure construction works progressed ahead of the schedule. The 20 MN press was delivered in December 2022, and the first billet was extruded in Q.1, 2023. The second press of 40 MN was installed in 2023. The new presses, and specifically the 40 MN one, will be used in the production of profiles for the automotive business (complex aluminium products of special mechanical properties intended for crumple zone control, and bodywork structures). Proper configuration of the new presses (tooling and parameters setup) will also enable extruding profiles for construction business customers and for other market segments, e.g. electrical engineering. Investments at the Advanced Aluminium Products Plant [ZZPA] concentrated on the improvement of effectiveness and extension of the area of highly-processed products manufacturing.