Alcomet’s Development and Growth Process

We met Nely Toncheva, Sales director and member of the Management Board of the Bulgarian company which is one of the main manufacturers of rolled products and extrusions in the Balkan area

by Giuseppe Giordano

Alcomet has been operating for the past 37 years in the field of aluminium processing and is now one of the top 100 Bulgarian companies in terms of revenues, number of employees and growth rate. Nely Toncheva, Sales director and member of the Management Board, has been and still is one of the main players as regards Alcomet’s development during the past few years; we had the pleasure of interviewing her during e recent business trip to Italy and to begin with we asked her to provide us with an updated summary of the company’s activities.
“Alcomet’s plants”, Nely Toncheva explained, “are found in the Industrial area of the city of Shumen in northern Bulgaria, not far from the Black Sea and particularly form Varna harbour. Alcomet has been active since 1981 and for years the main markets have been above all the domestic Bulgarian market followed by Eastern European countries. After the company’s privatization in 2000, sales to the European Union grew constantly: currently about 90% of production is sold outside Bulgaria, mainly in Europe. Among EU countries, the main market for Alcomet is Germany with a percentage of about 25% followed by Italy and Poland with about 15% each.

In 2000 the company was privatized, how is property subdivided today?
The majority of shares now belong to FAF Metal, a Turkish family owned business which purchased Alcomet during its privatization between 1999 and 2000. The first commitment for the new owners was to start off a complete revamping of the plants which was followed by an investment plan in the extrusion, rolling and foundry segments. From 2000 to 2016 we invested about 85 million euro to improve our production capability, which during this period increased almost fourfold, producing revenues which today almost reach 200 million euros. In 2016 we announce a new investment program for 40 million euro. The growth process is far from complete: the next investment plan concerns the increase in production with the installation among other machines of a cold rolling mill and a new extrusion press. Of course our aim is not only increasing quantities; we also envisage a development of products with greater added value with respect to the current ones, such as, foil for flexible packaging and rolled and extruded products for the automotive industry.

What is the general outlook of the current production activity, subdivided by sector?
Starting from extrusion, today the production of extrusions adds up to about 20,000 tons per year, achieved with four presses, but in a very short while we envisage starting production with a new 2,500 ton machine which will increase capacity by another 10,000 tons. Billets come mainly from our internal foundry equipped with a Wagstaff semi-continuous casting system with a production capacity of about 25,000 tons per year. Alcomet only manufactures alloys with a medium-low mechanical resistance such as EN AW 6060, 6082, 6005 and their derivatives and variations. Extrusions are used for applications in the building, automotive and interior design industries, in the production of furniture in general and for other industrial purposes. Alcomet’s die park comprises over 5,000 units.

What are the dimensions of the extrusions which you can currently produce and with what types of supplementary finishings can you provide them?
Our Wagstaff Hot Top casting system produces billets with 4, 6, 7and 8-inch diameters; with the 8” billet on the 2,000-ton press, the CCD for solid profiles is 200 mm and for hollow profiles, 180 mm. On the opposite end of the scale, we recently introduced a 600-ton press dedicated to the production of high precision profiles weighing up to 50 g per metre and with a minimum wall thickness of 0.8 mm. Alcomet also has an integrated anodizing plant and a powder coating plant which can coat about 2,500 tons of profiles per year. Regarding supplementary machining, I would like to mention that we made significant investments in precision cutting systems for profiles and machining with numeric control machines in order to satisfy the growing requests on our clients’ part, the feedback from the market was very positive and today 20-25% of our extrusions leave the plant after undergoing various types of mechanical machining. With the arrival of the new press this share will grow and as a consequence the average added value of our production will grow too. Regarding the new press i would also like to mention that it will be using dies with up to 12 channels and a minimum weight of about 80 grams/metre and a minimum wall thickness of 0.8 mm.

Which are the main markets for these little profiles?
There are many requests in the furniture and interior design sector, in the lighting industry, in the production of mosquito screens. What counts most is, the new press will have a high productivity and better allowances for these profiles compared to the present press.

Let us now move on to rolled products: how are you moving in this sector and which are your main productions?
In the rolled products sector the current production is achieved using a cold rolling mill, an intermediate rolling mill, a break down and two mills per sheet. Soon a new rolling mill supplied by SMS will start functioning; we already completed the relative masonry work. This is a next-generation six high cold mill, with a 2,200 mm width and an external coil diameter of 2,500 mm. When this new rolling mill will be fully operative, our production capacity in the rolled product sector, which is currently of about 50,000 tons, will double. The development project will carry on with auxiliary machines such as doubling machines, longitudinal and transverse “cut to length” cutting machines, heat treatment and annealing furnaces. The uses of rolled products are many, from sheets for kitchen foil to insulating sheets, from fin stock for the car industry to container foil. In the HHF segment Alcomet represents roughly 25% of the European market, and we are growing considerably in the container foil sector. Automotive applications, not just fin stock, are product targets, while in the sheet sector we are developing products for flexible packaging and this means rolling out thinner and thinner sheets.

Does the entire current production of rolled products derive from continuous casting semis or is there a share from bars produced using DC?
The entire production of rolled products is based today on semis from continuous casting produced internally. The foundry has seven continuous casting lines capable of producing rough semis up to 1,570 mm wide in 1xxx,3xxx and 8xxx alloys. In the future, with the new rolling mill I mentioned before, we shall have to decide regarding a possible investment in a DC casting plant and a hot rolling mill to tackle even the production of hot rolled alloys for more complex applications, in the ongoing quest for higher added value products.

What do you consider to be the strengths of Alcomet which could convince a medium-sized user of extruded and rolled products to use your company?
I think our main strengths are flexibility, the capability of moving on the market with rapid decisions, a willingness to discuss and form a partnership with the client. Our location is also an important asset, since the Shumen plant is central with respect to large European markets, goods only travel on average for three or four days and for exports outside Europe, Varna harbour is less than a hundred kilometres away.

To conclude this interesting meeting, could you provide a quick comment as to what might happen in the near future to the global aluminium market and particularly to the segments you are interested in?
Looking at the fundamentals of the economy and based upon my experience accrued in the segment, I can say that a future of further expansion undoubtedly lies ahead of aluminium; regarding the semis segment, both as concerns extrusions and rolled products, the past year has been positive and consumption forecasts for 2019 are good, there are only fears of external interference independent from the industry, as we unfortunately went through and endured during the course of this year, which could bring about uncertainties and alter this
climate of trust.