Having finalised its takeover of Luxembourg-based pyro- and hydrometallurgical engineering company Paul Wurth, steel plant construction specialist SMS Siemag, a division of SMS Holding, is now the only service provider worldwide that provides a full spectrum of technology processes for the steelmaking industry.

Paul Wurth specialises in the construction and modernisation of blast furnace plants, thus therefore complementing SMS Siemag’s expertise in metallurgical plant and rolling-mill technology to provide mutual customers with an integrated ‘one-stop steelmaking shop’.

Prior to the acquisition, which was finalised in December, SMS Siemag could only offer steelmaking-related products and services, including secondary metallurgy, casting and hot- and cold-rolling processes, while Paul Wurth offered the front-end services as a separate entity.

Following the acquisition, SMS Siemag can now support clients from the initial iron-making process, offering them a vertically integrated service and process-technology offering to assist those looking to develop new steel plants or modernise and expand existing plants, thereby helping clients enhance production efficiency and improve product quality.

“For now, the intent is to keep Paul Wurth South Africa and SMS Siemag South Africa operating separately but working closely to the benefit of the installed client base in Southern Africa,” says SMS Siemag South Africa MD Pieter Bezuidenhout.

The two companies already have several mutual clients and, owing to the acquisition, will strengthen their position towards these clients by identifying technological syner- gies, thereby reducing client investment costs, among other benefits.

“This ties in with risk manage- ment, as our clients now see more of their technological process being provided by a single group,” says Bezuidenhout.

He adds that the two companies are continuously working together to find synergies and enhance technological processes that will benefit their clients.

SMS Siemag South Africa board member Klaus Schmale tells Engineering News that the companies have already held a technological exchange meeting to streamline their product offering.

“It’s a fruitful partnership,” he says, adding that the best version of a technology has been adopted where the companies’ technologies have overlapped.

“The merger has, therefore, given us the opportunity to offer the best available technology,” says Bezuidenhout. He adds, however, that realising expected efficiencies remains an important challenge.

Bezuidenhout mentions that the merger will especially be beneficial to greenfield projects, but says the two companies will also re-evaluate their positions in sub-Saharan African projects currently under way, where SMS Siemag and Paul Wurth would have tendered for scope as independent entities before the acquisition took place.

“This is important for our clients, to whom we can now provide solutions from a single platform and take responsibility for those solutions, thereby providing better process guarantees,” he says.

SMS Siemag is aware of future opportunities in the Southern African market, having invested in a comprehensive research study last year to gain a better understanding of that market.

“Considering the current mineral exploration in Africa, steelmaking plants are sure to follow suit,” says Paul Wurth South Africa GM Johan Lotriet, who believes that SMS Siemag is now ‘perfectly poised’ to enter the market as a full-scale steelmaking technology supplier.

“We are ready to go into Africa when the need arises,” he posits.

Schmale adds that SMS Siemag is able to provide prefeasibility and detailed feasibility studies for upcoming projects, which is espe- cially beneficial with the addition of Paul Wurth’s service offering, which completes the full spectrum of steelmaking services.

He tells Engineering News that, in the past year, SMS Siemag has already conducted prefeasibility and detailed feasibility studies of new projects and greenfield plants in countries north of South Africa, where he believes there is significant potential for growth.

Meanwhile, SMS Siemag and Paul Wurth will continue to support their existing client bases by providing expert technical services, spare parts, plant modernisations and upgrades.

“We find that many plants in our market space are aging and have to compete with newer, more modern plants in other parts of the world. We do, therefore, want to support them in terms of improving their quality, reducing their operating costs and improving their efficiencies,” says Bezuidenhout.

SMS Holding, SMS Siemag’s parent company, announced its intention to purchase 59.1% of Paul Wurth on July 25, 2012, which included 48.1% from steel major ArcelorMittal and 11% from Luxembourg investment company Luxempart.

Bezuidenhout says SMS Siemag decided to take over the portion from Luxempart to acquire a majority shareholding. He adds that, before the acquisition could finally be approved, the transaction had to undergo several external international approval processes.