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Riva Forni Elettrici

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History

FORNI ELETTRICI

The Riva Group started in 1954, when the brothers, Emilio and Adriano Riva, established the Riva & C. S.a.s. and decided to start up on their own in an industrial business based on working and trading in scrap iron. It was supplied to steel and iron industries in Brescia that transformed it into fi nished products, mainly reinforcing bars, that the same Riva & C. provided to trade on the market.

THE MAIN EVENTS

1957 - The fi rst electric furnace In the summer of 1956, Riva decided to move to the direct production of steel and, in fact, already on 7 March 1957, the fi rst plant started operating at Caronno Pertusella, near Milan.The plant was equipped with an electric furnace, produced by Tagliaferri, with a 25-ton capacity per casting, when the size of the largest furnaces in Italy were still only 15 tons. Timely knowledge of the market and investments realised in the following years led to a very rapid growth in production, from 30 thousand tons in 1957 to 190 thousand tons in 1962, in an historical period – that of post-war reconstruction – that favoured steel and iron production.

1964 - Installing the fi rst 3 - line curving continuous castingThe nineteen-sixties marked an important period for the steel and iron sector. The Italian companies should face an increasing competition on a national scale and later, in a European and international context. This movement was accompanied by the extraordinary development of particularly competitive, small, steel works, based on steelmaking through electric arc furnaces and whose success culminated in the nineteen- seventies with the introduction of a new production technique: continuous castingContinuous casting was, in general, a great challenge for the iron and steel industry and, especially for the Riva Group, brought about very important results. From that time onwards, the small sized ingots that were later laminated into semiproducts (billets) and successively into long products, were abandoned altogether and the billets were obtained directly from liquid steel through this new process, which allowed the yield of the production cycle to be improved, reducing costs and making it possible to win new market shares.In Italy, only at the Terni Iron Works was vertical continuous casting being used, with a somewhat low yield.

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History

FORNI ELETTRICI

Emilio Riva was convinced that the curving model being researched on in Austria, then could offer far more substantial cost benefi ts and for this reason turned to Luigi Danieli, owner of the construction company of the same name, and to Renzo Colombo, a designer already engaged in a feasibility study on “curving continuous casting”, in order to create the new technology autonomously in Italy.

The collaboration between these three, the industrialist, the designer and the plant constructor, met with success: on 2 June 1964, in Caronno, the fi rst continuous casting created by Danieli started operating, and this was the fi rst three-line curving continuous casting to be introduced into Italy. It was precisely this continuous casting, thanks to the cost reduction it made possible, that enabled the Caronno Iron Works to deal with the 1964 crisis, i.e. the fi rst recession after the Italian “economic miracle” that led to the closing of many factories

1966 - Two takeoversIn 1966, Riva made a fi rst important acquisition concerning the Steel and Iron Works of Lesegno, in the Province of Cuneo, and became a minority partner in the SEII – Società Esercizi Impianti Industriali di Malegno (Brescia), where Riva also took over the management.At the end of the nineteensixties, the Riva Group produced 300 thousand tons of steel per year and was in a position to offer a wide range of long rolled sections, thus opening the way to working with foreign countries. The three essential factors contributing to the success of the company were: its fl exibility and very lean structure, with minimum fi xed costs; its high level of specialisation that meant it could deliver small batches in very fast turnaround time; its human resource management through direct relationships and a “horizontal” structure which encouraged staff participation and responsibility, thus giving rise to a continuous process of improved benefi ts.

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FORNI ELETTRICI

1970 - Market expansion begins The nineteen-seventies saw the fi rst huge investments on the European scene, starting from the acquisition in 1971 in Spain of a 5% holding in SISE (Siderúrgica Sevillana), together with a group of Italian, German and Spanish entrepreneurs. In the same year, Riva took over the management and, in 1978, after the progressive disengagement of the other partners, full control. In 1974, the Associated Steel Industries (ASI) was set up in Montreal, Canada, a company working on the selection and recovery of scrap iron generated by the Canadian automobile population. In January 1976, the Riva Group moved into the French market, taking out a holding and assuming the management of a small steel works (Iton Seine) specialised in the production of top quality reinforcing bars (for which it obtained the French quality approval CRELOI), later acquiring full control in 1997.

The world oil crisis in 1973-1974, with its considerable increase in energy costs, suddenly put the brakes on economic expansion in the whole of the western market, affecting all industrial sectors. The net decline in worldwide steel consumption registered in 1975 (-9%) and the aggressive sales policy practised by countries outside the European Community, such as South Korea, Mexico, Argentina and Brazil, put the traditional iron and steel industries into a state of crisis as their technologies were based mainly on more complex integral cycle plants with more rigid fi xed costs compared to the electric cycle that characterised technologically the Italian small steel works.

The United States, and other steel and iron areas, defended themselves, using protectionist measures, from the aggressiveness of the new exporters, who were ready to sell below cost on international markets, in order to improve use of their plants. This crisis affected hardest just those iron and steel works that were the most obsolete, especially those consuming more energy, that were still running in those countries that had not taken steps to make innovations in their production instruments. The Italian small steel works, thanks to their production and fl exibility and high level technological innovation, were able to deal with the situation, even winning market shares in the sector of long rolled sections, and in particular, in that of reinforcing bars.

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FORNI ELETTRICI

1980/1981 - Diversifying production signifi cantlyIn 1980, the Riva Group’s steel production reached 1.1 million tons (of which 61% in Italy, 28% in Spain and 11% in France) and the production of rolled sections reached 670 thousand tons (of which 34% in Italy, 45% in Spain and 21% in France).

The Group’s role as precursor regarding the commercial expansion of the small steel works in countries outside the European Community is also noteworthy. Already in 1978, the Group’s companies were the fi rst to sell steel directly in China, a market that previously had been exclusively Japan’s.

At the end of the nineteenseventies, while many iron and steel groups turned to the incentives provided by the European Community and national governments for the dismantling of obsolete plants, the Group invested massively in the new technologies: the levels of automation in the casting process grew, computerised plants multiplied, scientifi c research was speeded up and new possibilities in scrap iron procurement were explored.

At the beginning of the nineteen- eighties, more precisely in 1981, an important diversifi cation at production level was implemented with the acquisition of the company, Offi cine e Fonderie Galtarossa (OFG) of Verona, specialised in the production of not only high quality reinforcing bars but also wire rods for drawing. Under the management of the Riva Group, the company increased its steel production from 180 thousand tons in 1980 to 740 thousand in 2000.

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FORNI ELETTRICI

1988 - The PrivatisationsThe Italian public iron and steel industry, IRI–Finsider, together with other large European groups, received considerable public funding. This was how the fi rst phase of the EU restructuring of the Iron and Steel Industry was achieved, with the dismantling of plants all over Europe, the reduction of production capacity by approximately 30 million tons and approximately 30% of the labour force. In this context, in 1984, the hot rolling mill of the integral cycle plant Italsider of Cornigliano, where, in 1953, the fi rst “continuous wide strip mill” in Italy had been created, had to be closed.

The remaining part of the “hot” working of the unit was broken up and transferred in 1985 to COGEA (Consorzio Genovese Acciaio) whose management, with relative majority of the shares, remained in public hands despite the entry of capital from private operators (including the Riva Group). The Riva Group’s interest in the Cornigliano factory arose from the need to reduce its own dependency on scrap iron, which was increasingly diffi cult to fi nd in Italy because of insuffi cient supply and for which it was becoming increasingly necessary to resort to importation.

In 1988, the Group acquired other shareholdings in COGEA, so that an absolute majority of the shares was reached, leaving only a minority share in public hands. The consortium was transformed into a Joint-Stock Company, under the name of “Acciaierie di Cornigliano”. With the acquisition of the majority share, the Riva Group assumed its management. It was in this way that the fi rst privatisation in Italy of an integral- cycle iron and steel factory was achieved. From 1989, this factory has produced on average 1 million tons/year of semi-fi nished products. The Cornigliano factory enabled the Riva Group to extend its product range to slabs (semi-fi nished for the production of fl at rolled products). Still in 1988, the Riva Group played a leading role in a further important privatisation, this time carried out in France, with the acquisition of a majority shareholding of the capital in ALPA (Aciéries et Laminoirs de Paris), which possessed a production plant (electric steel works and rolling mill for reinforcing bar) at Gargenville. In 1989, the Riva Group produced 3.2 million tons of steel (of which 2.1 in Italy, and 1.1 in Spain and France) and 2.2 million tons of rolled sections, covering approximately 10% of the reinforced bars production of the EEC.

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FORNI ELETTRICI

Between 1989 and 1992, the expansion of the Group increased in countries with a long tradition in the iron and steel industry, such as Belgium and Germany. In Belgium, the rolling mill no. 3 of Charleroi-Marcinelle was bought out, of which the production capacity was 750 thousand tons/year and a new electric steel works was created to feed it. In this way, the Thy Marcinelle was born, (image 10) which in addition to consolidate the occupational need of the area, represented also a concrete revitalisation of a region characterised by a deep crisis of the iron and steel sector and where a large Italian labour force had traditionally been present and which, now, received from Italy also capital, technology and entrepreneurial skills

1992 - Acquiring two steel plants in the Berlin areaAt the beginning of the nineteen- nineties, German reunifi cation and the privatisation of the corporations of the previous Eastern Germany, enabled the Riva Group to acquire two steel and iron plants located in the region of Berlin: Brandenburger Elektrostahlwerke and Hennigsdorfer Elektrostahlwerke. Both were bought out in 1992 from the Treuhandanstalt, the German body in charge of privatisation of the ex-DDR companies.In 1992, these companies produced respectively 749 thousand and 360 thousand tons of steel. In 2000 they produced respectively 1,283,000 and 811,000 tons of steel.

1994/1995 - Acquisition of ILVA LAMINATI PIANI from I.R.IIn 1994, with a total production of 5.8 million tons of steel and 5 million tons of rolled sections, the Riva Group had reached dimensions that placed it among Europe’s leading players. Expansion continued in April 1995 when the Riva Group, as partner with absolute majority, bought from IRI, together with other Italian and foreign minority partners, the whole capital of Ilva Laminati Piani. This operation indubitably represented the most important privatisation in the whole of the Italian Government’s disengagement from the iron and steel sector.This purchased company, which combined many of the companies controlled by the publicly owned ILVA, produced fl at non-stainless steel rolled sections mainly at its factories in Taranto, Novi Ligure, Genoa – Cornigliano – and Turin. With the acquisition of Ilva Laminati Piani (which has gone back since 1997 to the name of ILVA), the Group also acquired control of companies producing tin plate (ICMI), large-sized plates and pipes (ILT) and other companies dealing with transformation and verticalisation of fl at plates, including Tunisacier, with its works at Biserta, in Tunisia. Acquisition of the Ilva Group was of fundamental importance in the story of the Riva Group.

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FORNI ELETTRICI

At production level, this led to a leap forward in annual steel production between 1994 and 1995 from 6 to 14.6 million tons and in the production of rolled sections from 5 to 12.8 million tons. Obviously, this huge enterprise required a long process of re-organisation extending up to 1996 and essentially focussed on eliminating non-strategic investments, mergers and acquisitions, oriented towards integrating Ilva into the Riva Group, in addition to simplifying the structure of the Group.This action allowed the Group to triplicate its net turnover (from 3,000 billion lire in 1994 to 9,300 billion in 1996) over only two years, and to multiply by almost nine times its net profi ts (from 112 billion lire to 945 billion). 1996 - IBL Sellero acquired In 1996, the Riva Group bought from the company IBL, 100% of the Sellero (BS) factory, which is now Riva Acciaio. In this works, in 1998, an investment in strengthening the rolling mills for beams was made, which led to a growth in the productive capacity from 300 thousand to 500 thousand tons

1997/1998 - Acquiring the share majority of HELLENIC STEEL- SalonicaIn 1997, furthermore, ILVA bought majority control in Greece of HELLENIC STEEL, a company producing galvanised, tin plate and cold rolled sections, while in Italy it incorporated the Acciaierie di Cornigliano.In the meantime, the Riva Group had progressively increased its own shareholding in ILVA S.p.A., which on 31 December 1998 was shown as consolidated in the balance sheet of the group leader RIVA ACCIAIO in an amount equal to 57,85%. In 1998, moving forward in the process of company reorganisation, it was resolved to merge and incorporate into RIVA ACCIAIO, the Acciaierie Ferriere of Caronno, the Acciaierie Ferriere of Tanaro, theOffi cine e Fonderie Galtarossa and the SEII.

1999 - Sea logistics In 1999, the Riva Group, implementing a strategy of improving the logistical structures linked to its own iron and steel business, decided to invest further in the shipping sector through its company ILVA SERVIZI MARITTIMI, purchasing a 250 - thousand ton transoceanic ship (the Arcturus), which was equipped to transport raw materials, especially minerals, business that up to then had been carried out by third party ship owners.The ship - no longer owned as it was sold in 2009 - like all the others units, sailed under the Italian fl ag and its crew was exclusively Italian.

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History

FORNI ELETTRICI

In addition to this investment, over the last years the Group has further strengthened this sector by purchasing two push boats and four 30.000 DWT lighters, dedicated to the transportation of fi nished-products, so achieving an innovative rationalisation in sea logistics.The ship, no longer owned as it was sold in 2009, like all the others units, sailed under the Italian fl ag and its crew was exclusively Italian.

In addition to this investment, over the last years the Group has further strengthened this sector by purchasing two push boats and four 30.000 DWT lighters, dedicated to the transportation of fi nished-products, so achieving an innovative rationalisation in sea logistics.The push boats become detached from the main part of the ship (lighter) during the unloading phase, then it couples the lighter that has concluded its loading and thus carries out a new trip, optimising time in the use of the boats. These last investments in the shipping sector have made the Riva Group one of the most important Italian ship owners.

2000 - Acquiring SAM Group, France In 2000, the French Group, SAM, was purchased with its 8 production and transformation plants in 5 European countries and employing approximately 1,500 people. The SAM Group produces 1.5 million tons of steel, 70% transformed in the Group’s works into wire rod, electro welded mesh and building products. In the same year, two new plants became operative. 2013 - Founded Riva Forni ElettriciIn order to face the steel market special characteristics, a new holding of steel long products is born at the end of 2013 called RIVA FORNI ELETTRICI S.p.A., made up of RIVA ACCIAIO and many other foreign group companies.

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FORNI ELETTRICI

TODAY RIVA FORNI ELETTRICI currently owns 21 production sites of which 7 are based in Italy. The Group maintains an considerable presence worldwide with works in Germany, France, Belgium, Spain and Canada.

Its companies oversee all the stages of steelmaking, from the production of the liquid steel from in the electric arc furnace (EAF) down to hot and cold rolling. Steel core production and its further processing is complemented by other diversifi ed and synergistic activities such as scrap recovery (one plant in Canada where scrap is selected and prepared and one crushing plant in France).

The comprehensive IT network running through the Group organization ensures decentralized operations carried at the single units to be aligned and complementary to decisional inputs given at a central level. Information is managed and data are pro-cessed in real time in all the factories of the Group. The most complex management requirements can be met at once by such IT architecture and orders are monitored effectively at any stage of production and marketing.