Bekaert announced that the company has delivered its first batch of tire reinforcement with third-party certified recycled steel content to Bridgestone Corporation.

A press release said that Bekaert has been paving the way for tire reinforcement with high recycled content that contributes to the circular economy. That steel’s recycled content reduced the company’s CO2 footprint by about 50%.

“There are many claims about circularity of materials in the tire industry, but lack of clear definitions and standards can lead to doubt on the validity of those claims,” said Bekaert’s Heiko Isselee, innovation platform manager for recycled steel. “This third-party certification of both Bekaert and our wire rod supplier enables us to provide our customers with a guarantee of compliance of the recycled content claims based on recognized industry standards.”

The certificate allows customers such as Bridgestone to include the recycled content in the Bekaert products it uses to the tally of recycled content in their tires. Bekaert applies the best available recycled content definitions and traceability of materials. Bekaert’s tire reinforcement has a minimum recycled content of 50% for tire cord and 70% for bead wire. The rigorous processes at the supplier’s wire rod factory and at the Bekaert steel cord plant allow Bekaert to trace the content in the composition and separate this material from others in all steps of production, storage, and transport. Thus, it is guaranteed that the physical content of the steel cord and bead wire supplied to our customers contain the declared amount of recycled steel.

“This successful pilot is the first step toward setting a new industry standard for recycled content in tire reinforcement, and to making certified tire reinforcement with high recycled content available to our customers across the globe,” the release said.

Bekaert announced it has reached an agreement on the sale of its Steel Wire Solutions businesses in Chile and Peru to its current partners.

A press release said that the transaction—which has a total enterprise value of approximately $350 million, and will result in net proceeds for Bekaert’s stake of $136 million—is expected to close in 2023, subject to applicable regulatory approvals and customary closing conditions. The facilities manufacture, sell, and distribute steel wire products primarily for construction, agricultural fencing, mining, and industrial applications.

The agreement includes shares held by Bekaert in the following entities: Industrias Chilenas de Alambre-Inchalam SA in Talcahuano, Chile; and Prodalam SA in Santiago, Chile; along with their subsidiaries in Chile and Peru. Bekaert currently holds 52% of the shares in the Chilean entities and 38% of the shares in the Peruvian entities. The transaction excludes Bekaert’s wholly owned Bridon-Bekaert ropes entities in Chile and Peru.

The release said that the divestment decision relates to Bekaert’s strategy in recent years to improve its business portfolio by reducing exposure to more commoditized and volatile markets while increasing its presence in faster growing markets. Those include new mobility, green energy, and low-carbon concrete solutions that typically offer higher profit margins and higher returns on capital. “While the partnership has been successful for nearly 75 years, Bekaert believes it is now the right time to exit these businesses and focus on our target segments.”

The activities of the companies to be divested generated approximately €650 million in consolidated revenue in 2022, with a profit margin below the Bekaert target range. “The proceeds from the transaction will further strengthen our balance sheet and support our commitment to shareholder returns and investment plans for growth.”

“Bekaert was an early entrant into the Latin American market,” said Kenart CEO Oswald Schmid. “Our partnership ... in Chile dates back to 1948 and was extended with the establishment of our partnership in Peru in 1994. ... At the same time, it is another important strategic step in the ongoing transformation of Bekaert and its further positioning in new, fast-growing markets.”

Bekaert is delighted to have been selected as a member of the new BEL ESG index and see our sustainability performance and progress recognized.
The BEL ESG index comprises the leading sustainable, Belgian listed companies and tracks those demonstrating the best environmental, social and governance practices. The index also highlights the market’s growing demand for sustainable investments. The company celebrated the inclusion of Bekaert in the BEL ESG index during a bell ceremony at Euronext Brussels.

In related news, Bekaert also reported signing a third Power Purchase Agreement in India, leading to a total CO₂ reduction of more than 60% at Bekaert’s operations in India.

7/12/21  Bekaert announced that it will expand the company’s plant in Lipetsk, Russia, investing approximately $24 million to add a new production line for bead wire and to increase its current tire cord manufacturing capacity.

A press release said that the Lipetsk plant produces steel cord for the tire industry and Dramix® fibers for construction markets. The bead wire line will allow the company to make a full range of products for the reinforcement of tires. The projects are expected to create 80 new jobs. The production start of the plant extension is planned for the first half of 2022.

The news was announced at the St. Petersburg International Economic Forum (SPIEF ‘21). “This expansion will help the Bekaert Lipetsk team to continue to deliver superior value to their customers and to contribute to the customers’ growth ambitions in the region and the wider CIS, as well as to become an export platform to the European region,” the release said.

In January 2008, Bekaert first announced that it would strengthen its existing position in Russia by investing more than €97 million in a new steel cord production plant in the Lipetsk Special Economic Zone. At the time, Bekaert already had a portfolio of customers in Russia for steel cord products for tire reinforcement, steel fibers for concrete reinforcement and other specialized wire products, but they were being supplied by its plants in Central Europe. With the first phase, first production was scheduled to start in 2010, with other work phased in through 2013.

The Lipetsk plant, which serves customers in Russia and the wider CIS region, is about 400 km south of Moscow. Bekaert has also had a sales office in Moscow since 1998, that serves a portfolio of customers with a wide variety of advanced steel wire products.

Bekaert announced that it is taking wide-ranging steps to improve the company’s competitiveness that will include downsizing in Belgium—where it is based—cutting operational costs and shifting some operations and activities to be more cost-effective.

"We want to organize ourselves in a more agile and cost-efficient way," said a press release that noted that margins have suffered to where action is called for. It outlined steps in three areas.

The first calls for relocating some activities in Belgium to lower-cost locations. Those include: moving the production-related standard test lab activities to production plants that have a global service role; moving the spare parts activities to Slovakia, close to Bekart’s main production plants in Central Europe; and moving certain pilot line developments and upscaling pilot developments to industrialization. These activities would be located in the relevant "key learning plants" to speed up the development and time to bring product and process innovations to market.

The second step relates to the very competitive nature of the EMEA (Europe, Middle East and Africa) market for steel fibers in the European concrete reinforcement market, the release said. Because competitors have moved their manufacturing footprint to Central Europe or are sourcing fibers from low-cost countries, Bekaert’s Dramix^® plant in Moen, Belgium, is not competitive with the current pricing trends in EMEA. As such, Bekaert will close the Moen plant and further upscale Dramix production at its plant in Petrovice, Czech Republic.

The third step is "to reduce certain activities and align them better with the business needs and the new organizational structure of the Group," the release said. This would include a downsizing of administrative and other support roles "by better leveraging the potential of standardization, centralization, outsourcing and relocation." As a result, the engineering, technology and functional departments in Belgium will focus "much more on their respective, global expertise roles and act as strategic business partners. They will be helping the business with the capability to deliver on the short- and long-term goals."

The release said that implementing the described actions "will improve our competitive position in the market place worldwide by significantly reducing our cost structure, which will help improve the financial performance of the Group sustainably."

The restructuring would affect 281 jobs in Belgium. Per a report in flandsersnews.be, the job losses include 70 at Moen, outside Zwevegem; a further 44 in Zwevegem itself; 106 in Deerlijk; and 61 in Ingelmuntser.