Refratechnik Strengthens Involvement in China with JV in the Raw Material Sector

Refratechnik is a globally positioned group of companies and employs 1500 people at 25 sites. Dr Rainer Gaebel (RG), Managing Director at Refratechnik Holding for sales as well as research and development, was happy to explain the company’s growth strategy and the measures necessary in this context. Fig. 2: Dr Rainer Gaebel (RG),
Managing Director  rwf: Rising and sometimes volatile raw material prices caused by the most im­port ant raw materials exporter China have been causing problems for the refractories industry in recent years as these prices are a key factor in the manufacturing costs. Refratechnik operates with Baymag Inc. magnesite mining and processing plants in Canada, and has now become involved in China. What is your strategic orientation when it comes to raw materials issues? RG: Raw materials are strategic issue, both for securing our own supply as well as for widening the product portfolio of the Refra­technik Group. That is why we are getting so intensively involved in this area. We are committed to the expansion of existing partnerships and establishing new partner­ships. Here, we are working increasingly in centrally coordinated structures and pres­ent ourselves on the market accordingly. In November 2018, through Refratechnik Asia based in Hong Kong, a joint venture contract was signed with the companies Haicheng Guotian Mining and Yingkou Jinlong Refractories for the production of high­purity Caustic Calcined Magnesia (CCM) as well as Dead­Burned Magnesite (DBM) in Pailou Town, Haicheng, China. Yingkou Jinlong Refractories and Re fra­technik are long­standing partners in Chi­na, and Haicheng Guotian Mining is an experienced mine operator with long­term and assured access to MgO ores. rwf: How is the new involvement pos­itioned in the Refratechnik Group compared with Baymag in Canada? RG: In Canada, we mine one of the high­est­quality ores in the Western Hemisphere. The thickness of the deposit is enormous, and its full extent has not yet even been explored. Baymag is currently supplying primarily customers in North America with CCM. On account of the high quality, the products are ideal for industrial ap­plications, like, for example waste water treatment. For the supply of the Refratechnik Group with DBM and FM, the Baymag deposit is a strategic asset on account of the stable general conditions, the geographical loca­tion and above all our resulting relative independence of raw materials giant China. In China, for many years mining has been operated that good qualities have been selectively extracted, and now in many de posits the consistency and quality of the raw materials can increasingly no longer fully meet the ever­higher requirements of the refractories industry.
In our project in China, with professional extraction concepts and suitable processing technology, the quality of the raw materials and therefore that of our refractory prod­ucts is secured. The engineering of a plant according to the state­of­the­art – includ­ing flotation – has already begun in Hai­cheng, production is set to start up in 2019. The contract was signed in September 2018. In 2019, the first plant instal lation phase was completed and production tests conducted. In the long term, an output of 100 000 t/a DBM or more than 100 000 t/a CCM is planned. rwf: Are these raw materials supplied ex­clusively to Refratechnik plants? RG: On account of the general conditions described, our priority is the long­term as­surance of the quality of the raw materials for our two production firms in China – Zibo Refratechnik Refractories Co. Ltd. and Yingkou Refratechnik Refractories Co. Ltd. The supply of our plants in Europe can, of course, also profit from it. But unlike in China, in Europe we don’t see ourselves faced with any comparable challenges in the medium and long term. We maintain good partnerships with local raw material suppliers, which endure even in difficult times.
Besides securing our own supply of raw materials, the JV in China increases our capabilities in CCM. As the products and the geographic orientation are complemen­tary to Baymag, the new JV is an almost ideal addition to our group’s raw material activities. rwf: How do you assess the potential of the refractory market in China for your plants? RG: We have been active in China for a long time and know the market very well as a “top player” in the cement industry. We have learned to attune to the business mentality of our partners and custom­ers. With benchmark products, service and know­how from China and Europe, we are positioning ourselves as a solution provider for the users of refractory materials and set ourselves apart from local suppliers. For this reason, we have to attach extreme value to constant raw material quality in order to reliably maintain this in our products. In China, we are seeing a rethink from quantity to quality in all industrial seg­ments. Even if the steel or cement industry is not growing as strongly or is even on the decline, because of this rethink, we still see potential for growth. In the cement indus­try, we can score points with know­how developed in Europe in respect of the use of alternative fuels up to waste to energy. It’s a similar picture in the steel or aluminium industry. For know­how­based companies like Refratechnik that combine quality prod­ucts and services to systems that generate competitive advantages for the users, there are opportunities for growth. When we talk about China, then we almost always mean the Asian market overall. After China, now after many years of subdued growth, India will become in­creasingly important in the overall view. Asia is generally of strategic importance for us as, for example, in Europe on account of demoscopic factors but general policy framework, too, growth is limited.
The markets in Asia are served by our plants in Europe as well as in China. This flexibility is important for us and our cus­tomers. Stronger than even 10 years ago, today increasingly external factors such as customs, logistic costs and increasingly state funding that are taken into account in decisions, play a role in which plant in the group the customer is supplied from. This is another good reason for us to assure the raw material quality on a high level so that the well­known high quality of Refratechnik products can be produced in every plant. rwf: What importance does the recycling of refractories have in your company? RG: We are working intensively on that for all segments. It is a matter of sustainable management, the conservation of finite resources, and the further reduction of CO2 emissions.
A certain pioneering role with regard to the know­how on this topic within the Refratechnik Group has been taken by Refratechnik Ceramics in Melle. We want to use this know­how across the entire group. Recycling, however, has to be regarded in very selective way. The objective can, for instance, be realised comparatively easily in the recycling of refractory linings of e.g. converters in the steel industry. In cement plants on the other hand, the materials are sometimes severely infiltrated by alkaline salts from raw materials or fuels, which makes recycling technically very complex and expensive. On top of that come logistic problems, and also the volume produced is far lower than in the steel industry. Ultimately, the prices on the raw ma ter ials market are crucially influencing the development and realisa­tion of new tech nol ogies for recycling re­fractory materials. An exciting topic in the context of the preservation of resources and CO2 reduc­tion are renewable raw materials. We shall soon be presenting products with a raw material basis of rice husk ash (98–100 % amorphous biogenic silica), and can meet a wide range of insulation application requirements, e.g. as lightweight refractory bricks of different classifications, ladle and tundish insulation, etc. We already have decades of experience with these mater ials as bulk solids, as we use them as loose filling in insulation ap­plications worldwide in continuous casting and in ladles. In recent years, we have developed binder systems and shall develop more binders that enable us to press parts for a wide range of applications and, above all, application tem pera tures to 1600 °C. These can be installed either directly as boards or bricks, and are simply reworked prior to installation.
Resource efficiency in respect of energy and materials remains also in future a central topic in our development work, to work out further advantages for our customers. We are currently very success­ful in significantly reducing the thermal transfer of long­term tested products while maintaining their mineralogical and physi­cal characteristics. For our customers, that consequently means a direct energy, and therefore cost saving in the simplest case. Moreover, these products also enable new lining concepts that can be installed easier and faster than the traditional concepts. rwf: How will digitalization change your business models in future? RG: We already find ourselves in a digital transformation. What can be digitalized, will be digitalized. We were a pioneer in automation in the refractories industry, and we want to be at the vanguard in digitaliza­tion. Digitalization is part of our adaption to changing demographic conditions. Un­like with automation, however, we can’t just concentrate on ourselves.
Crucial will be the interfaces to our custom­ers. And they also have to be digitally set up, too. We are preparing first internally, and are setting ourselves up to be flexible, so that we are optimally positioned to meet future requirements. What business models result in future, remains to be seen – here, too, it ultimately depends on our custom­ers. We have lots of ideas on this. One thing is clear to us: the future does not lie in the not very intelligent bidding platforms, that has been shown by our experience and also that of our customers.
With all euphoria about the capability and diversification of communication channels, databases and digital instruments of all types, we shall in future in no way neglect the human interfaces. For working out individual solutions, the basis of trust with the customer is ulti­mately crucial. We ex peri ence, that in the day­to­day business with our customers actually more intensively today than just a few years ago. Perhaps that is a conse­quence of digitalization. In any case, we shall work to make sure of this. rwf: What are you doing to increase cus­tomer focus? RG: We are steadily expanding our global presence. The geographical proximity to the customers is more important than ever in the dawning digital age. Besides the expansion and the further development of the classical service offerings in refractories, we are committed to knowledge manage­ ment.
Here, the REFRA­Academy plays an im port­ant role. For many years, we have offered courses and seminars in our modern train­ing centres for customers in the cement industry.
The demand for this is even stronger than it used to be. The need for exchange and mutual learning is growing continuously. If our customers cannot come to us at our training centres in Germany, Mexico or China, then we come out on site to them worldwide with the REFRA training pro­gramme. For other industrial segments, like heavy clay ceramics, steel and aluminium, too, we are currently increasing our training capacities. rwf: How is Refratechnik set up in support­ing young professionals? RG: We are also looking into the future and are committed through the group companies as well as in the scope of the Alexander Tutsek – Foundation to support­ing young people in the industry long­term. Only recently has the Foundation again awarded scholarships in engineering at Munich’s University of Applied Sciences. At the Universities of Freiberg and Coblenz, young academics are selectively qualified with master and diploma theses, doctoral dissertations, and are introduced to future work in our companies or in the indus­trial branch. The Foundation does not just support young academics at several Ger­man universities, it also supports training on a broad basis to master and technician levels. rwf: Could you give us an outlook of the new business year? RG: Refratechnik was able to successfully conclude 2018 with its companies and is confidently looking beyond the current business year to our anniversary year 2020, when we shall be able to look back on 70 years of experience. We shall be able to further optimise our expertise as a system supplier for refrac­tory solutions, and secure that with the preservation and further development of professional expertise.
We have to respond proactively to shifts in the market and evolving new techni­cal requirements, to serve our customers promptly with effective solutions that lead permanently to improvement. The combination of continuity, reliability and expertise is truly lived within our group, in a personal respect, too. With this com­pany philosophy, we are successful in the markets and remain committed to working together with our partners in a trust­based relationship. rwf: Thank you for talking to us.