RHI Magnesita backs sustainable growth for bigger Chinese presence

China Daily | Updated: 2019-04-26 08:33

Austria-based refractory material maker RHI Magnesita will expand its presence in China as it seeks sustainable growth in the fast-changing market. The company's CEO Stefan Borgas shares more details with China Daily.

Q: How was RHI Magnesita's business performance in the Chinese market in 2018?

A: The Chinese market is of high importance to us. China's steel, cement and glass industry tops the world in terms of output. So far, we are a relatively small player in the Chinese refractory market. We have operated plants with over 2,000 employees in China for many years.

Since 2018, we've had an ambitious business plan in place to offer our services, technologies and products to Chinese manufacturers requiring high temperature solutions. We built up a strong, China-focused management team with both local and international experts as part of our "China for China" strategy. We constantly hire more talented professionals who take responsibility quickly.

Our R&D center is expanding fast with the best globally available technologies and much investment. We have already made significant progress to expand our product portfolio to the specific needs of the Chinese market. In 2018 we increased our revenue in China by over 30 percent to more than 1.3 billion yuan ($193.6 million).

Driven by our technology leadership, the strong local production footprint in China and further investments to come on stream in 2019, we are confident to continue to grow and start new partnerships with Chinese industry.

Q: Does RHI Magnesita have plans to increase its investment in China? What is RHI Magnesita's business strategy in the coming years?

A: An important strategic step toward improving our competitiveness and supply security in the medium term is our investment in our Chizhou dolomite hub in Anhui province.

We have already shipped the first 1,000 tons of high-quality products to our customers and the process of ramping up production is well on track. The investment in Chizhou increases our raw material integration in the region, which will allow us to expand our unique position in the industry and offer our customers in China and Asia the best service and shorter lead times. This product group will significantly expand the market for these types of products in China.

Q: In 2015, RHI Magnesita established its R&D center in Dalian of Liaoning province, how has it developed since then?

A: The center in Dalian is one of the five R&D locations we operate around the world. Currently it is the fastest growing of all of them. Our industry-leading R&D team consists of more than 250 researchers and experts.

Since the establishment of our R&D center in Dalian in 2015, a huge variety of successfully adapted tailor-made products for the local market have been developed and we will continue to focus on these efforts in 2019.

We are currently building state-of-the-art installations that will be the envy of the global technology community. All this is to service our customers faster, better and find the best solutions for them.

Q: How do you evaluate the current Chinese market and what do you expect from it in coming years?

A: There is a growing demand for high-quality products, digitalization and ecological solutions for the fast-changing Chinese market. Since 2017, we have also seen a step change in refractory raw material production as China has rigorously implemented new environmental standards, which adjusted the level of production to global standards.

In the second half of 2017 and 2018, this led to a dramatic increase in raw material cost. This was not a short-term "hike" but the newly recognized responsibility by the very professional Chinese raw material producers to be careful with our planet's resources, and has led to a new normal.

All in all, we are positive that our investments and elaborate initiatives will further help us to succeed in the Chinese market and will set us up for sustainable growth.