Europe's first new steel plant in 40 years takes shape in Austria

23 April 2018

Europe’s long steel slump could be coming to an end as construction starts tomorrow on the first new specialised plant in 40 years at a site in Austria.

Industrial giant Voestalpine is building the €350m factory, which it expects to be almost completely automated, at Kapfenberg, south-west of Vienna.

The construction work itself should take three years and create up to 1,000 jobs. Work in the factory itself will be highly digitised, meaning more monitoring of machines by computer and less of the traditional work in front of blast furnaces.

Chairman Wolfgang Eder said it was a sign European manufacturers can still operate competitively. He called the investment “a positive signal” for European industry, as it was the first in a new steel plant in decades.

Europe’s steel industry has been in long-term decline as cheaper production in countries such as China has undercut more expensive western workers.

Pressure from trading partners including the US has pushed China to cut some of the excess capacity in its state-backed plants.

However, there are still concerns its state-backed factories are dumping subsidised steel onto markets, undermining other countries’ industries.

As a result the US has slapped tariffs on steel and aluminium imports. The EU is exempt from the tariffs, however, which should relieve some of the competitive pressure on its steel output.

Voestalpine’s site, which is the size of six football pitches, should produce 205,000 tons of high-performance steel per year.

Customers for the conglomerate, which has a market value of €8bn (£7bn)y, include car factories, aeroplane manufacturers, and the oil and gas industry.

The Kapfenberg factory will also produce materials for the 3D printing of complex metal parts.

Voestalpine also has a UK factory with its Metsee plant in Oldbury, in the Midlands, which employs almost 400 people.

To work in the new digitised factory in Austria, the staff will be trained in the use of robotics, sensor technology and data analysis.

Voestalpine also plans to operate the electric arc furnace entirely with renewable energy, and expects its new factory to cut its use of water for cooling by up to 90pc.