arcelormittal italia italian steel: building a sustainable
TRANSCRIPT
ArcelorMittal Italia
Italian steel: building a
sustainable tomorrow
ArcelorMittal EuropeMedia Day 2018
ArcelorMittal Italia
• Key deal milestones
• The priorities of our plan
• Our plan, our first results, our new targets
Why ILVA is strategical for ArcelorMittal
Concentration of production in
larger and more efficient sites1
2Increased geographical balance and better presence in
South Europe and in Italy, the second largest European
steel consuming market
3Solid asset base
Taranto is the largest integrated steel plant in Europe
Key deal milestones 2014 - 2017
2014 Beginning 2015 June 2017 Sept 2017
First
publication of
ILVA contract
notice
First
ArcelorMittal
offer
ILVA is
assigned to
AM InvestCo,
contract
signed with
Italian
government
Environmental
law approved
Jan 2016
Second
publication of
ILVA contract
notice
Key deal milestones 2018
May 2018 July 2018 1 Nov 20186 Sept 2018
Antitrust approval
from European
Commission
Enhanced
environmental
and social
commitments
Agreement
with unionsArcelorMittal
Italia takes over
ILVA operations
A solution for everyone
10,700 people hired by ArcelorMittal.
For the employee remaining in ILVA AS:
• Access to voluntary separation programme
• No forced lay-off
• Hiring guarantee by ArcelorMittal at the end of the plan
Environment
• Most ambitious environmental plan ever
• Enhanced deadlines and performance commitments
ArcelorMittal Italia
• Key deal milestones
• The priorities of our plan
• Our plan, our first results, our new targets
The three priorities
Sustainability and reputation• Health & safety and environment
• Compliance
Performance and profitability
Integration
The approach
Sustainability
and reputation
Performance
and profitability
Integration
Beg. Nov
Target setting and
planning.
Quick win launch
End 2018
Prioritisation and
implementation
launch (short cycles)
• Priorities set and
agreed
• Tracking and
steering
2019
Turnaround
implementation
• Projects
realisation (inc.
environment)
• Stop losses
Beyond
Structural
continuous
improvement
towards excellence
ArcelorMittal Italia
• Sustainability & reputation:our plan, our first results, our next targets
9
Sustainability and reputation: health and safetyThe plan
* Lost Time Injury Frequency is defined as the lost time for an injury for 1,000,000 hours worked; based on workers and internal contractors
3,12,5
1,9 1,81,4
1,0 0,9 0,9 0,8 0,8 0,8 0,6 0,7 0,6
ArcelorMittal Health & Safety Lost Time Injury
Frequency (LTIF) rate*
Extraction & steel, workers and contractors
3Q182007 20112008 2009 201420132010 2012 2015 2016 2017 1Q18 2Q18
ArcelorMittal promotes improvements
to reach “world-class” levels through
• Training > e.g. "Take Care” training
for all workers (47,000 people): 20
day-programme to improve health and
safety culture on top of all legal
requirements
• Monitoring > Our attention is directed
towards all of the touch points found in
the safety pyramid
• Certification > All of the ArcelorMittal
Europe sites have the OHSAS 18001
certification. Our objective is to be the
safest metals & mining company.
Align the health and safety performances to ArcelorMittal standards
Sustainability and reputation: health and safetyWork in progress and next targets
• Risk assessment of all sites updated against the new
organisation and the knowledge and experience gained by
ArcelorMittal
• Safety leadership training and coaching and H&S training
activities organised in November and December for more
than 7,500 people
• Introduction of new operational tools (ex. Hira Lite)
• Internal awareness campaigns on targeted topics (use of
handrails, safety glasses, etc.)
H&S initial action ongoing
Principles of compliance of ArcelorMittal
• ArcelorMittal business conduct
• Continuous training
Protection and
appropriate use
of company
goods
Equity
of the
agreements
Avoid any
conflicts of
interests
Compliance
with law
Respect
for the
community
5. 2.
1.
4. 3.
Sustainability and reputation: environmentThe plan
Our most ambitious environmental plan ever
Raw material yards
Zero dust emissions in
Tamburi from the raw
materials yards and
conveyor belt before the
first half of 2020
€300m
Water treatment
Elimination of
run off polluted water
€167m
Coke plant revamping
Technology best-in-class
€200m
Investments of €2.4 billion of which €1.15 billion is dedicated to the environment
Filter in the sinter plants
Dust, metals and dioxin
reduction to lower levels
than EU BAT
€35m
Main areas of
intervention
Sustainability and reputation: environmentThe plan
€2.4 billion of investments: €1.15 billion for the environment
1.15
2.40
1.25
428
290
172
167
40
CAPEX commitment till 2024 (€ billions)… … which €1.15 billion are for the environment
Environmental 2018-2023
Industrial2018 - 2024
Total CAPEX2018 - 2024
Reduction of canalized emissions(e.g. coke plants)
Reduction of diffuseemissions(e.g. raw material
yards coverage)
Water treatment (rain and processed)
Fixing solutions
Upgrade fire prevention plan
Equivalent to €500k per day
After the investment,
ArcelorMittal Italia will
be a global benchmark
in the steel sector
Sustainability and reputation: environmentThe plan
Improved environmental commitments
Intervention Requirements under DPCM 2017 ArcelorMittal’s commitments Improvements
Iron ore yard coverage • Start of the works required by 30.09.2018
• Completion within 36 months from
ArcelorMittal taking the business
(31.10.2018)
• Works started on 01.02.2018
• Planning to complete in 24 months,
within end of December 2019
• Work started 8 months earlier than required.
• Expected to complete at least 22 months
ahead of deadline.
Coal and coke yard
coverage
• Completion within 36 months from
ArcelorMittal taking the business
Planning to complete within end of
May 2020
Completion at least 17 months earlier than
required.
Sinter plant dedusting • First strand to be equipped with bag
filtration technology by 31.12.2021
• Second strand by 23.08.2023
• First strand to be upgraded by
31.03.2021
• Second strand to be upgraded by
30.09.2022
• 9 months ahead of the deadline (with hybrid
filters technology)
• 11 months ahead of the deadline (with hybrid
filters technology)
Treatment of the coke
oven gas
Level of H2S content in the coke oven gas
below 500 mg/Nm3, with the exception of
during the annual plant maintenance (20 days)
Implementation of the improvement of
the coke oven gas desulphurization
plant within 36 months from
ArcelorMittal taking the business.
• Reduction of SO2 emissions associated to the
use of coke oven gas at Taranto plant.
• Maintenance of the H2S level in coke oven
gas below 500mg / Nm3 even during the 20
days of annual maintenance.
Waste water treatment for
the Blast Furnaces
scrubbing water
Compliance with new limits by 1st July 2020 Built new waste water treatment,
applying in house technology for which
a patent has been filed in December
2017
• Anticipate to future regulation by avoiding the
use of highly hazardous chemical,
formaldehyde.
• Tailor made solution: onsite testing with
ArcelorMittal pilot plant ongoing since
November 2017
Sustainability and reputation: environmentWork in progress and next targets
Environmental plan: quick update
• Implementation of the
pump and treat system at
the raw materials yard
area in order to create a
hydraulic barrier
• Removal of the historical
storage of rail traverse and
old tires and
characterisation of the
area
Done To be completed by end 2018 What’s next?
• Dredging of the channels
(1st part – end by 31.05.19)
• Coverage of the landfill G2
(1st part – end by 31.05.19)
• Implementation of the mobile hoods for the
aspiration of the fumes during BOF slag
pouring at the “GRF area” as well as the
impermeabilisation of the pouring area
• Enclosure of buildings where dusty
material is handled
• Dismantling of the old tank S3
• Adaptation of temporary waste dumps
• Primary raw materials yard
coverage – ongoing
• Pavement of the BF slag yard –
ongoing
• Investments at the coke batteries
– ongoing
• Conveyor belts enclosure –
ongoing
• Sinter yard coverage ordering for
South and North
• Intervention for collection and
treatment of rain water
• Start of dismantling BF3
Sustainability and reputation: environmentWork in progress and next targets
Raw materials yard coverage: a unique project in Europe
Yesterday
TodayTomorrow
Starting of excavation
activities on iron ore
yard
Installation of
foundation poles on
the iron one yard and
assembling of the
erection piers
Completion of the
first arch of the shed
1st Feb 2018 May 2018 Q4 2019 May 2020Dec 2018
Completion of the
mineral park
Finalisation of the
fossils and coke
area
ArcelorMittal Italia
• Performance and profitability:our plan, our first results, our next targets
Performance and profitability: industrial planThe plan
We have to bring profitability back to a
sustainable level and in line with our potential
Today's performances show a considerable gap compared
to ArcelorMittal
ArcelorMittal Italia has the potential to improve its results
quickly
Only a sustainably profitable company can invest and
create value for all stakeholders
Performance and profitability: industrial planThe plan
€1.25 billion for the industrial plan
To support the
important plan of
technical investments,
ArcelorMittal will have
to ensure an
appropriate cash flow
Performance and profitability: industrial planWork in progress and next targets
• Continuity ensured on transferred contracts & orders (inc. payments)
• Event with 130 suppliers in Taranto and individual meetings with current and
potential suppliers as per business needs
• Enter into new partnership with suppliers in full transparency Next goal
Buy
• Ensure business continuity: raw materials, maintenance and repair
• November 2018: Restart production of plate mill and hot rolling mill #1
• Main operational priorities are being set up per area for proper industrial
turnaround
• 6mt crude steel production from 2019 onwards Next goal
Make
• Implementation of the ArcelorMittal commercial approach and internal policies
• Become a reliable supplier able to offer a superior service level through an enlarged
and improved range of products Next goalSell
Performance and profitability: industrial planWork in progress and next targets
Research & Development Centre in Taranto:
in development
Staffing & building• Staffing plan is done, two-waves strategy: 15 people by March
2019 / at least 12 people after the summer holiday
• Final building: many solutions have been reviewed
• Performance improvement action plans started on:
environment, blast furnaces, BOF converter, secondary
metallurgy, continuous casting, hot strip millR&D process
• Launch action plans on production processes such as pipe & tube forming,
pickling, cold rolling, galvanizing, tinning
• Completion of buying, billing, IP, IT procedures
• Start developing the network with Italian engineering schools and universities
ArcelorMittal Italia
• Integration:our plan, our first results, our next targets
IntegrationThe plan
Deployment of operating practices and processes in ArcelorMittal Italia to
support turnaround activities
• Use of internal benchmarks in the Group to guide actions to
improve industrial KPIs
• ArcelorMittal experts with extensive experience in different
sites, stationed on ground in Italy to support and guide Italian
colleagues in their improvement actions
• “Twins” from rest of ArcelorMittal Europe to provide more
dedicated support for improvement and product development
Integration: communication and
corporate responsibility The plan and next targets
Our approach: transparency and continuous dialogue with all our
targets/stakeholders
Done
• Town hall meeting in Genova and in Taranto with more
than 2,200 attendees from all the departments
• Press conference and several interviews with national
and local media to present the plan
• Meeting with 130 suppliers
Next steps
• January 2019: formalise a partnership with the Soprintendenza ai beni
culturali di Taranto (local Fine Arts Service) and universities to use a location
inside the plant in Taranto to examine and stock - for research objectives -
the ruins of a Roman aqueduct near the plant which collapsed in November
• Several other CR initiatives under review and preparation
Integration: HRThe plan and next targets
Our people: our primary asset
Done
• September – November: selection of 10,700 out of 13,800 following the criteria of the agreement
• 1st November onwards: secondment of 10,700 employees from ILVA S.p.A. in AS
• Continuous monitoring of process and transparency toward unions
• November 12th: (re)hiring process launched. About 260 recruitments per day
Next steps
• January: workforce complete with headcount of 10,700
• Integration of ArcelorMittal Group HR processes (evaluation, KPIs, …)
• Definition of a training plan by role/function
• Group mobility
• Industrial relations: build new social dialogue forums, EWC
Conclusion
Sustainability and reputation• Health & safety and environment
• Compliance
Performance and profitability
Integration
Questions & Answers