Zelezara Smederevo to make parts for Fiat? - SRSC plans to invest in equipment for processing sheet metal for automotive industry

The destiny of Smederevo-based ironworks, Zelezara, will determine business direction of many companies whose production directly depends on the steel producer. The news on re-launch of the high furnace, launched in late April gladdened all of them and while waiting for the information on decision on the potential partner from Ukraine, the Government of Serbia is ensuring it will do it takes not only to sustain the production in ironworks Zelezara but also to invest in new products. Among them being the production of car chassis sheet metal of Fiat Cars Serbia company.

Serbian Roll Service Company (SRSC) depends on Smedervo-based ironworks, Zelezara, not only when it comes to organization but in location and strategy sense. This company whose core activity is processing of operational rollers by chromium plating and grinding, operates as a joint venture, i.e. as mixed business company Canadian corporation CHL (Court Holdings Limited) set up in 2008 with U.S.Steel Serbia" (current Serbian steel produce– ironworks, Zelezara Smederevo).

The basic idea was to build a special roller processing section in order to additionally increase value and quality of final product of ironworks Zelezara – cold-rolled sheet metal.

Investment of significant capital in new technologies and equipment (some EUR 4 million), the SRSC production was built within the Cold Rollin mill, ironworks, Zelezara Smederevo hall and the production started in early 2011.

- Since our company directly depends on the ironworks Zelezara’s destiny and that the production in the steel factory was halted for 9 months (as of August 1, 2012 until May 7, 2013), we cannot say we are satisfied with the work in the previous period. Current difficult situation when it comes to production maintenance and finding new strategic partner influences us to great extent and it can potentially influence the future of our company - Boban Rajkovic, the General Manager of SRSC says for eKapija.

The collocutor of eKapija points out that company business activities intensified with the production re-launch in ironworks Zelezara and that they were assured by the Government of Serbia that it would do everything not only to continue production but also to additionally invest in expansion of Zelezara final product range.

This first of all refers to the plan of the Government to start an investment in completely new line for steel sheet metal galvanization together with the new strategic partner of ironworks, Zelezara. This would improve product range of ironworks Zelezara since this galvanized sheet metal would find buyers in car industry. Firstly, this sheet metal would be produced for domestic car industry Fiat Cars Serbia.

For SRSC this would mean implementation of previously planned investments which were caused by production halt in Zelezara.

- Our company would, in cooperation with Zelezara, invest in procurement of new EDT machine for the treatment of texture of operational roller area through electro discharge (Electro Discharge Texturing). This provides adequate texture of the surface with micro recesses at the roller surface which, in the production process i.e. steel sheet metal rolling, transfers to its surface thus reaching remarkable deformable features of material which contribute to better processing on presses by deep extraction, which is an obligatory prerequisite in production of steel sheet metal for car industry – Rajkovic says.

The investment would total some EUR 1,5 million and according to SRSC estimation it would pay back during the first 1-2 years of exploitation. As Rajkovic mentions, the fact that this investment would enable SRSC to open a couple of new vacancies should not be neglected and that thus it could provide exclusive EDT roller processing to other clients in the neighborhood because there are no many sections in Europe which have similar machine.

Mother company of this company, Canadian CHL, firmly believes in the potential of this part of Southeastern Europe and the Balkans which is confirmed through plans and new investments in Serbia, It will, as they say, depend on potential improvement of investment terms. Apart from accompanying industry of roller processing for the needs of rolling mills and coloured metals mills, CHL Canada operates in production of precise machine parts for car industry ( valves for blocks of car motors) as well as production of equipment and railway industry parts (such as break cylinders for cars, etc.).

Capacity

Current capacity of SRSC total 600 rollers a month on CNC machine Hercules drill for circle roller drilling (current capacity fulfillment is 67%) and 1500 rollers a month on a solid roller chroming (current capacity coverage is 33%).

With production services in rollers processing this company provides, apart from Zelezara’s final product quality improvement, significant cost savings in cold processing steel sheet metals totaling up to EUR 1,2 million annually.

SRSC used previous period in production halt to develop and implement the overall integrated management system by introducing three most important ISO standards: 9001: 2008 (for quality), ISO 14001: 2004 (for environmental protection) and ISO 18001: 2007 (for safety at work), with the expert help of the Belgrade branch office of the Swiss certification house SGS.

New clients

Except from the fact that company business activities were intensified by re-launch of production in Smederevo-based steel company and that new investments are underway, SRSC is looking for new clients apart from Zelezara. They have already established contacts with leading steel sheet metal rolling mills in the region such as Arcelor Mittal Skopje, aluminum rolling mill Impol Seval as well as Sevojno-based Rolling mill.

- We entered trial stages of trial solid chroming of their rollers after which we expect positive reaction and thus establish a long-term cooperation- Rajkovic said.

- Apart from steel rolling mills and colored metals, our clients can be all other users of machine parts which should, during the exploitation process, be protected with a layer of a solid chrom, such as: rollers in textile industry, printing houses, industry of plate tyres, backs and axis for ship motors, etc.

I. B.