H.C. Starck, one of the leading manufacturers of customer-specific powders and components made of technology metals and technical ceramics, performed well in 2015 despite a difficult market environment.
The company increased its revenues from the previous year to 815.2 million euros (2014: 785.9 million). By December 31st 2015, the company employed a total of 2,679 employees worldwide (2014: 2,678).
“Last year was, once again, due to the situation on the raw material markets highly challenging for H.C. Starck.” explained Dr. Engelbert Heimes, CEO of the management at H.C. Starck. “Currently, there is an imbalance between supply and demand for some of our most important raw materials, which has led to a significant drop in prices. However, this unusual market situation will not be permanent. It is only a question of time before the market achieves a new balance and the price level can increase significantly once again.
Oil price and low growth influence tungsten business
The Tungsten Powders division recoded a significant reduction in revenues in 2015 due to the difficult market situation. “The demand from the oil and gas industry, in particular, which is another important consumer of our products in addition to the mining industry, is declining due to dropping oil prices,” explains Dr. Heimes. Also the significantly weaker growth of industrial products in China and in numerous developing countries affected the revenues of the Tungsten Powders division in 2015. Tungsten powders by H.C. Starck are used primarily in producing industrial tools and wear parts in order to facilitate high-performance processes like drilling, milling, and grinding metals to industrial standards.
Significant increase in tantalum / niobium powders business
By contrast, the year 2015 recorded a very successful business trend for the division of tantalum / niobium powders. After implementing a series of measures, it has succeeded in increasing the profitability of the division significantly. H.C. Starck, thus, purchases a majority of its primary raw materials from long-term and sustainable conflict-free sources in Africa. In addition, in H.C. Starck Smelting, slags containing tantalum and other recyclable materials are processed inexpensively. Thereby the price / performance ratio for high-capacity tantalum powder was adjusted in order to make it even more attractive to the tantalum capacitor market. With new products and new ideas, we succeeded in gaining access to new market shares outside of the electronics industry. The niobium business revenue at H.C. Starck alone doubled in 2015.
Surface Technology & Ceramic Powders: Expansion of services to the growth market of 3D printing
Despite the current oil and gas market situation, the Surface Technology & Ceramic Powders division was able to record a significant positive development in 2015 in comparison to 2014, with regard to both revenues and profitability. This is due partially to the fact that the division serves a wide spectrum of customers and is therefore not solely dependent on the developments of a single market share. In addition, the division has great potential for growth, for instance through participation in the Swedish firm Metasphere Technology: This allows H.C. Starck to develop new products for the quickly growing market of 3D printing in close collaboration with the machine producers, using the firm’s unique technology for manufacturing spherical powders.
More orders for the Fabricated Products division
The Fabricated Products division succeeded in increasing order volume for the aerospace and defense industries, due to the stable economic situation in North America. The division was in some industry segments, due partially to the drop in the price of raw molybdenum, confronted with a difficult market environment in the second half of 2015.
Above all for products in the high-temperature furnace and semiconductor markets, this led to a noticeable drop in revenues. Overall, the stable business performance and ongoing positive cashflow achieved by the Fabricated Products division have made a large contribution to stabilizing overall earnings at the H.C. Starck group.
Long-term supply security through joint ventures
H.C. Starck has succeeded in establishing strategically beneficial positions for the company through our two tungsten joint ventures in Vietnam and China. Our joint venture in Vietnam has allowed us to secure a long-term supply of inexpensive tungsten ore. The Chinese joint venture has allowed H.C. Starck to position itself for the long-term on the world’s largest tungsten market in China.
Tungsten products by H.C. Starck are used as high-performance materials in many growth industries, in particular in tool construction, medical technology, the automotive industry and energy industry, in wear parts in mining, tunnel, and street construction, as an alloy metal, in capacitor production, the chemicals industry, and for components in the aviation industry.
Secure raw materials supply thanks to strong recycling activities and a certified procurement process
A secure and competitive supply of raw materials, based on sustainable ethical and social foundations and environmental principles, continues to be a key component of the business strategy at H.C. Starck: In spring, H.C. Starck received a certification for processing so-called “conflict-free” tantalum raw materials for the fifth consecutive year. The inspection for the certification was completed by the independent Electronics Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) as part of the Conflict Free Smelter Program (CFSP).
In addition, the company plans to recycle even greater quantities of secondary materials in the current fiscal year: “Our goal is to make our supply of raw materials even more independent from speculation on the raw materials market. This is why we not only process conflict-free ore concentrates, but also recycle an increasing quantity of secondary goods in order to secure our supply with inexpensive raw materials,” says Dr. Heimes.
Changes to company management
As we have already announced, Dr. Engelbert Heimes, former Chairman of the Advisory Board, has taken over the position of CEO after Dr. Andreas Meier left the company. In doing so, he vacates his office as Chairman of the Advisory Board, which is being taken over by Gregor Böhm, Co-head of the Europe Buyout Advisory Group at The Carlyle Group. In addition, Dr. Jens Knöll is advancing to become Chief Operating Officer (COO). Dr. Knöll came to us in February of 2015 as Chief Strategy and Transformation Officer of H.C. Starck. During this time, he has been able to implement the turnaround program with great success, with which an increase in revenues, a reduction in raw materials and manufacturing costs, and sustainable improvements in processes within the powder divisions, were achieved. Dr. Knöll will also continue to be responsible for moving the powder divisions into a new corporate legal structure in his new role. The goal of this shift is to reinforce corporate independence and accountability for results within the new units. The idea to develop a chemicals park in Goslar, which has come about as part of this program, also falls under Dr. Knöll’s responsibilities.
Until Dr. Michael Reiß returns, the organizational structure on the GmbH level will be established as follows:
•CEO: Dr. Engelbert Heimes
•CFO: Dr. Matthias Schmitz
•COO: Dr. Jens Knöll