Outokumpu has announced that it will restart its ferrochrome production project to double the Group’s ferrochrome production capacity in Finland. The investment totals EUR 440 million including interest and is based on an updated feasibility study conducted during the spring.
The original investment was decided in June 2008 but was put on hold in December 2008 due to the financial crisis and unsecure market conditions. This investment doubles the ferrochrome production in Tornio to 530,000tns annually. It enables the Group to cover its internal needs and supply the global market with over 200,000tns of ferrochrome annually. The expanded capacity is estimated to be operational during the first half of 2013 with capacity ramped up in 2015. With current prices and exchange rates the expansion will bring additional annual operating profits in the order of EUR 150 million at full capacity.
It is estimated that when the expanded ferrochrome capacity is in full use, the effect of a 5 USc/lb change in the contract price of ferrochrome on the Group’s operating profit will double from the current EUR 10 million to some EUR 20 million annually.
