By Harry Floodopoulos
One of the most ambitious industrial investment projects presented in recent years in Greece has been implemented by ELVALHALKOR, seeking not only to increase its production capacity but to become one of the dominant players of European aluminium and copper processing.
The management of the group presented in detail the new strategic plan by 2030, based on total investments of EUR 850 million, of which approximately EUR 455 million relate to four major development projects to be financed by the forthcoming increase in share capital. The final objective is to provide adjusted EBITDA to reach EUR 425-475 million, with a significant increase in production volumes and even greater penetration in high added value markets.
The situation favours the metal industry
The main message of the administration was that the current situation is perhaps the greatest opportunity in recent decades for the aluminium and copper industry. Energy transition, electrification, data centers, defence investment, recycling and European strategic autonomy create a growing demand for both metals.
THE Executive Vice-President of Viohalco Spyros Kokoli It noted that ELVALCHALKOR is not a producer of primary metal but a high-tech processor, which means that its profitability does not depend on the fluctuations in LME’s international prices, as both raw materials and sales to customers are made on the same terms. The real value is created through the know-how, processing, quality and specialization of products.
Today the company exports to more than 90 countries, has over 3,500 active customers, while the five largest represent only 31% of sales, which significantly reduces business risk. At the same time, about 90% of sales are about repeated partnerships, many of which exceed 15 and 20 years.
From one billion investments to the next jump
The company has already invested over EUR 1 billion in the last decade, dramatically increasing both its volumes and added value of its products.
Previous investments doubled the hot rolled aluminium capacity, reaching 800,000 tonnes, creating the infrastructure on which the next development phase will be "built".
As explained by deputy CFO Angelos Yazijoglu, the company considers that now is the time to move on to the next step, as it already has the productive background, a strong and diversified portfolio of products and the major European and global trends fully coincide with the markets in which it operates.
The four projects that change production
The new investment phase is based on four key pillars.
THE first It concerns the installation of a third cold aluminium sheet, which will utilise the surplus capacity of the large hot sheet installed a few years ago.
THE second it concerns a new aluminium recycling and casting plant that will significantly increase the use of secondary raw material, reducing production costs and strengthening profit margins.
THE third a pillar is the creation of a corresponding unit for the utilisation of recyclable materials in copper, while the fourth includes smaller but critical extensions to Halkor's premises in Oinophyta.
According to the administration, total production capacity will increase by around 29%, while particular importance is given to scrap utilisation, as the use of secondary metal dramatically increases profitability.
In the aluminium industry the use of recycled raw materials will increase from about 32% to 45%, while in copper from 45% to 47%, while significantly limiting the carbon footprint of production.
The great opportunity of aluminum
General manager of Aluminium Nikolas Karabateas presented the evidence showing that the European market is in the face of a significant shortage of production capacity.
The rigid packaging creates an additional demand of about 450,000 tonnes over the next five years, as large companies gradually abandon plastic in favour of aluminium, which is recycled indefinitely without losing its properties.
At the same time, in transport, and particularly in electrical engineering, a new market of hundreds of thousands of tons is created, as aluminium is used in battery boxes and thermal management systems of electric vehicles.
ELVALCHALKOR currently has a share of around 14% in this market, which, according to the administration, leaves considerable growth margins. Long-term partnerships with leading car manufacturers, but also the recent distinction from Ford in the US, further strengthen its position.
Copper becomes strategic metal
Even more ambitious are the objectives of copper.
The General Director of Copper Panos Lolos stressed that copper has now been recognised by the European Union as a critical and strategic raw material, which creates a completely new environment for the industry.
The company develops new products for data centers, energy infrastructure, cooling systems and applications of electric motors, while investing in the production of copper lava, where it aims to gain first place in Europe within the next three years.
Even greater is ambition in the field of copper rolled. Today the company is in fourth place in Europe, but management estimates that within the next five years it can climb to second place, using both the new investments and the difficulties faced by several European competitors.
At the same time, the administration considers that European initiatives such as Industrial Acceleration Act, Critical Raw Materials Act and the new policies for the circular economy will further enhance the competitiveness of European processing towards imports from third countries.
Objectives by 2030
The business plan predicts that in the medium term aluminium sales will increase to 470,000–490,000 tonnes and copper to 200,000–210,000 tonnes, while in the long term sales are expected to reach 690,000 tonnes of aluminium and 290,000 tonnes of copper.
Organic operating profitability is projected to increase to 425-475m euros, the net lending ratio to EBITDA to retreat below 2 and the company to continue to distribute 35%-45% of net profits as a dividend.
The overall message of the administration was clear: the next decade will be a period of strong revival of the European metal industry and ELVALHALKOR aspires not only to participate in this course, but to star, turning a Greek industry into one of the strongest European groups in the aluminium and copper industries.
