North America

Bekaert_North America figures_2013 

Combined sales: € 548 million
Capital expenditures (PP&E): € 9 million
Total assets: € 245 million
Employees: 1 600

Unfavorable market developments such as low demand in domestic industrial markets and continued investment delays in energy and construction markets, combined with fierce competition from Asian imports and a significantly unfavorable currency translation effect due to the strong euro, drove revenues down in North America.
North American industries using steel wire were unable to leverage the 2013 consumer demand rebound as a result of increased volumes of imports of end products.

Bekaert’s manufacturing plants serving the US tire industry were therefore faced with lower demand, contrary to the automotive rebound. Bekaert’s flat and shaped wire activities could not leverage the upswing of automotive markets either, due to a highly competitive environment and operational performance issues. Bekaert continued to report solid performance in other markets it served, like the oil and gas industry. 

Demand for wires and strands used in power transmission and distribution, however, dropped drastically after years of significant growth. As a result of the fiscal cliff debate and deal in the US, and the related sequestration of government spending, large public investments in areas such as power grid renewal were put on hold. The business context for Bekaert’s activities in this sector suddenly changed from booming demand to a sudden investment freeze. Bekaert remains confident that this market will recover, but not until the decision is taken to make the necessary funding available for power grid renewal.

Higher volumes of competitive imports of wire products for the construction sector affected the fencing and building related activities. Bekaert exited unprofitable markets and trading activities competing with cheap imports and decided to cease its operations in Surrey (Canada), active in the production of steel wire for various industrial applications. The decision was made after observing a structural downward movement in the market on the west coast of North America. Bekaert intends to continue to serve its customers and markets in the region from its other North American manufacturing sites.

The Group’s Canadian wire rope activities, on the other hand, continued to perform well, with robust results driven by innovation efforts and favorable market developments. 

Selective investments to serve customers locally

Bekaert decided to invest a significant amount in bead wire manufacturing capacity in its Rome plant in Georgia, US. Holding a leading position in steel cord markets for tire reinforcement, this bead wire investment increases the range Bekaert offers from local production sources to the tire manufacturers in the US.

Post-balance sheet: through its affiliate Wire Rope Industries Bekaert started manufacturing steel ropes in the US in March 2014. The company established a production facility in Belton, Texas and will leverage its technological and manufacturing competences in steel ropes for the oil and gas sector under the operational management of Bekaert’s Canadian Wire Rope Industries organization. 

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