FA 01/ wire 2014: All wired up.

Wire keeps the world in motion – the current state of the sector.

Without wire, the world would grind to a standstill. Bicyclists ride around on spoke wheels, power cables run overhead and below the ground, supplying homes and companies with energy. Even armoured concrete is reinforced and stabilised with wires. Reliability of materials and their quality therefore are of high priority for makers and buyers of wire. Only those who rise up to the challenge will survive in the market.
The financial crisis at the end of the last decade also hit the wire sector with full force – a high wire act for some companies facing difficult times. However, the economy has picked up and so had business. Production is now running at full capacity.

Rosy future

German maker of wires, optical fibres, cables and cable systems Leoni AG, for instance, is experiencing good business. The company form Nuremberg, which has 90 subsidiaries in 34 countries worldwide, expects a group turnover of around 3.4 billion euro in 2011, and earnings before interest and tax (EBIT) of 210 million euro. Leoni had to revise its very positive profit and earnings forecast upwards.

Competition from Asia

The entire wire sector is experiencing similar things. Its well-being is closely connected to the development of the car and engineering sector – both are major buyers of wire products. In addition, there is also competition from Asia. „Steel makers from China and other, Far East countries are increasingly influencing the cycles of European companies“, analyses Deutsche Edelstahlwerke, a maker of wires and steel bars.
In general, the sector need not worry about the future. „Deutsche Edelstahlwerke sees the future of its products positively, as wire is needed around the world.“

Keeping an eye on hot spots

Developments in North Africa are however being followed with eagle-eyes. Leoni for instance employs more than 25.000 people in Egypt, Morocco and Tunesia. The unrest has not yet had any major impact on Leoni AG, apart from a few minor issues in production. There is no reason for a change of course in North Africa.
Apart from North Africa, Leoni is also keeping tabs on developments in Japan: whilst the company was not a buyer of Japanese semiconductors, it cannot be ruled out that the networked world may experience supply problems, which could have a negative impact on production.

Tradition und new trends

Way back in the 15th century, wire drawing replaced forging. Wire drawing has been the method of production for a very long time. Nonetheless, production technologies aren’t stagnating, as various trends prove.
Wire makers utilise modern technologies to profit from the current situation. SMS Meer has an open ear for the requirements of the wire industry. ArcelorMittal Hamburg GmbH recently entrusted the plant and machine builder to modernise its wire rod mill. SMS Meer will convert the mill to two single-strand rolling lines. Looper tables will have to be moved and two new mill stands will have to be put in place for each of the mills. According to  SMS Meer, the cantilever mill stands „present a new generation“, which „are able to absorb even higher rolling forces and rolling torques.“ ArcelorMittal aims to increase product quality with its newest investment.

Drawing faster and faster
A current development is towards faster wire drawing with a consistant level of quality and narrow tolerances. Schwering & Hasse is a good example. The maker of enamelled wire for use, amongst others, in electric motors and electronic components, recently invested in a new wire mill for a state-of-the -art bare wire production. A new, 5000 square metre large hall was built to accomodate a two-stranded blooming mill, a medium-wire machine and conform units. According to Schwering & Hasse, the investment will optimise the company’s energy efficiency and reduce noise emissions. „Quality parameters along the value chain are improved, which results in a reduced failure rate, high consistency of wire softness, thus securing later processability of the enameled copper wire.“

Deutsche Edelstahlwerke is also continuously optimising its process to make sure production stays as efficient as possible. The internally developed Deutsche Edelstahlwerke Production System (DPS) forms the basis for the company’s quest for efficiency. It gives the company a framework on how to make processes more efficient and less wasteful. Selection, structuring, cleaning, standardization and self-discipline are amongst its principles. The company offers set-up workshops at its facility in Hagen, Germany.

High material demands

Various materials such as steel, aluminium, copper, gold, pewter and platinum are used to produce wire. „Materials used for wire need to meet the rising demands of customers and the developing fields of application“, explain Deutsche Edelstahlwerke. Demands are especially high concerning the purity level, uniform structural properties and material testing.

Lightweight construction a challenge

High-strength steels are becoming more and more important for lightweight construction. „Weight reduction for reducing fuel consumption and emissions is a huge trend“, states Dr. Gerhard Bartz, president of the German association of wire and cable machinery manufacturers VDKM and executive member of the umbrella group International Wire and Cable Exhibitions Association. This applies for a great part to the car industry, which accounts for 60 percent of the German wire market. One example: as weight needs to be saved, thinner valves are made, which again has consequences for the procurement of primary materials. And that’s not all. According to Bartz, there is a „trend to composite design, using aluminium, steel alloys, carbon and textiles. Substitute materials such as plastics and textiles are increasingly important in the highly important car sector”. Use of refined wires such as Nirosta is also growing - especially in cars and medical technology.

Sophisticated production

Higher demands from buyers also put machine builders in a tight spot. „Customers want current machines to provide higher performance“, says Andreas Hoster, from Wafios marketing department. Highly complex and more difficult part geometries are required. On the one hand, customers want single-purpose machines for mass production, on the other hand, they also want flexible multi-functional machines for low-volume and very low-volume production.

High degree of automation
Wire manufacturing without automation is unthinkable nowadays, manual labour is very seldom. Be it modern rolling mills, bright steel companies or newest-generation finishing equipment – most is done fully-automatically by pressing a button and is controlled from a console. For Deutsche Edelstahlwerke, production therefore isn‘t „a handcraft anymore in the literal sense, but high-tech.“

Automation is a lucrative market for companies such as SMS Meer. The company not only delivers mills, but also process control systems. This has proven to be a successful combination. „There are clear advantages if the supplier not only supplies the mechanical side, but also delivers the process control“, declares SMS Meer. Using a single supplier as a one-stop-shop can ensure things go smoothly.

Quality control - no compromises

High quality demands strict control of the production process. Schwering & Hasse reorganised its production systems in order to control the company’s 24/7 production on an even higher level. Wire production used to be controlled every 100 metres. „New machines and sensors now make it possible to continuously control and document wire production centimetre by centimetre.“

As a consequence, there has been a dramatic rise in data. In the case of Schwering & Hasse, the new system collects 60.000 signals per second. Software analyses the datastream and visualises the status. The software automatically recognises deviations and fault patterns, „so the operating personnel can react immediately“, the company explains. The advantages can be clearly made out – product quality can be raised and costs saved, as less material goes to waste. Developments nonetheless continue. In the next step, machines will automatically respond and react if error messages pop up. „Demands for quality assurance are increasing. There can be no comprises, if you want to enter new markets with technical products“, states Schwering & Hasse.

Upgrading machinery

Deutsche Edelstahlwerke has also reacted to the growing importance of process traceability and security by making large investments in related technologies. In the last few years, the company bought a new ultrasonic inspection station and new finishing equipment, in order to increase safety, productivity and ergonomics. In addition, a fully automatic peeler for rings, bars and conical parts found its way into the plant.

New market perspectives

Not only are wire manufacturing machines and plants undergoing constant change. New markets are also appearing on the horizon. Deutsche Edelstahlwerke is not the only company which sees a lot of potential opportunity for wire products in power engineering, „which is undergoing rapid development due to current energy policies.“ Metallux AG also shares the same assessment. Metallux resistors in wire technology make sure wind turbines don’t get out of breath.

A success story

From a geographical perspective, the wire industry has set its eyes on emerging economies such as China, Brasi and India. This is also the case for the Middle East. Gustav Wolf Seil- und Drahtwerke recently invested in a new, 2050 square metre large production facility in Dubai. It contains three wet drawing machines for wire manufacturing, two double-bunching machines for stranded wire and a single stroke machine for wire rope production as well as a winding and separating machine for assembly.

The company has been operating its site in Dubai since 2004. According to Gustav Wolf, the site has so far been a success story. „Around 50 percent of production goes to the Arab market.“ Low wages and electricity prices belong to the benefits of the site located in Dubai’s free trade zone. The Dubai site also helps Gustav Wolf to secure jobs in Germany.

Focussing on niche products
There is no question about it, the European wire industry has to come to terms with competition from the so-called emerging markets, just like all first world regions. One way is to move away from mass products – at least that’s what Deutsche Edelstahlwerke is doing: „By continuing to specialize on niche products, we are able to outperform our competitors.“ Such a strategy can ensure economic survival in the competitive wire market, and can contribute to a positive business outlook.