H.C. Starck Revenue Increases 4% in 2015
H.C. Starck performed well in 2015 despite a difficult market environment.
H.C. Starck performed well in 2015 despite a difficult market environment. The company increased its revenues to €815.2 million (approximately $926.5 million) from the previous year’s €785.9 million (~ $893 million). By December 31, 2015, the company employed a total of 2,679 employees worldwide vs. 2,678 in 2014.
“Last year was, once again, due to the situation on the raw material markets, highly challenging for H.C. Starck,” said Engelbert Heimes, Ph.D., CEO. “Currently, there is an imbalance between supply and demand for some of our most important raw materials, which has led to a significant drop in prices. However, this unusual market situation will not be permanent. It is only a question of time before the market achieves a new balance and the price level can increase significantly once again.”
The Tungsten Powders division recoded a significant reduction in revenues in 2015 due to the difficult market situation. In addition, the significantly weaker growth of industrial products in China and in numerous developing countries affected the revenues of the Tungsten Powders division in 2015. “The demand from the oil and gas industry, in particular, which is another important consumer of our products in addition to the mining industry, is declining due to dropping oil prices,” said Heimes.
By contrast, 2015 recorded a successful business trend for the Tantalum/Niobium Powders division. After implementing a series of measures, the company reportedly succeeded in increasing the profitability of the division significantly. Thus, H.C. Starck purchased a majority of its primary raw materials from long-term and sustainable conflict-free sources in Africa. In addition, in H.C. Starck Smelting, slags containing tantalum and other recyclable materials are processed inexpensively. The price/performance ratio for high-capacity tantalum powder was adjusted accordingly in order to make it even more attractive to the tantalum capacitor market. With new products and new ideas, the company succeeded in gaining access to new market shares outside of the electronics industry. The niobium business revenue reportedly doubled in 2015.
Despite the current oil and gas market situation, the Surface Technology & Ceramic Powders division was able to record a significant positive development in 2015 in comparison to 2014 with regard to both revenues and profitability. This was reportedly due partially to the fact that the division serves a wide spectrum of customers and is therefore not solely dependent on the developments of a single market share. In addition, the division has great potential for growth, such as through acquisition of the Swedish firm Metasphere Technology; this allowed H.C. Starck to develop new products for the quickly growing market of 3D printing in close collaboration with the machine producers, using the firm’s technology for manufacturing spherical powders.
The Fabricated Products division succeeded in increasing order volume for the aerospace and defense industries, due to the stable economic situation in North America. The division was confronted with a difficult market environment in the second half of 2015 in some industry segments due partially to the drop in the price of raw molybdenum. Above all, for products in the high-temperature furnace and semiconductor markets, this led to a noticeable drop in revenues. Overall, the stable business performance and ongoing positive cashflow achieved by the Fabricated Products division made a large contribution to stabilizing overall earnings.
H.C. Starck reportedly succeeded in establishing strategically beneficial positions for the company through its two tungsten joint ventures in Vietnam and China. Its joint venture in Vietnam allowed the company to secure a long-term supply of inexpensive tungsten ore. The Chinese joint venture has allowed H.C. Starck to position itself for the long term on the world’s largest tungsten market in China.
A secure and competitive supply of raw materials, based on sustainable ethical and social foundations and environmental principles, continues to be a key component of the company’s business strategy. H.C. Starck received a certification for processing “conflict-free” tantalum raw materials for the fifth consecutive year. The inspection for the certification was completed by the independent Electronics Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) as part of the Conflict Free Smelter Program (CFSP). In addition, the company reportedly plans to recycle even greater quantities of secondary materials in the current fiscal year.
“Our goal is to make our supply of raw materials even more independent from speculation on the raw materials market,” said Heimes. “This is why we not only process conflict-free ore concentrates, but also recycle an increasing quantity of secondary goods in order to secure our supply with inexpensive raw materials.”
Engelbert Heimes, Ph.D., former chairman of the advisory board, took over the position of CEO after Andreas Meier, Ph.D., left the company. In doing so, he vacated his office as chairman, which is being taken over by Gregor Böhm, co-head of the Europe Buyout Advisory Group at The Carlyle Group. In addition, Jens Knöll, Ph.D., is advancing to become chief operating officer (COO). Knöll came to the company in February 2015 as chief strategy and transformation officer. During this time, he has been able to implement a turn-around program with great success, which achieved an increase in revenues, a reduction in raw materials and manufacturing costs, and sustainable improvements in processes within the powder divisions. Knöll reportedly will continue to be responsible for moving the powder divisions into a new corporate legal structure in his new role. The goal of this shift is to reinforce corporate independence and accountability for results within the new units. The development of a chemicals park in Goslar, which has come about as part of this program, also falls under Knöll's responsibilities.
Until Michael Reiß, Ph.D., returns, the organizational structure on the GmbH level will be established as follows: Engelbert Heimes, Ph.D., as CEO; Matthias Schmitz, Ph.D., as CFO; and Jens Knöll, Ph.D., as COO.
For more information, visit www.hcstarck.com.