Extruded Products Segment

In 2021 the Extruded Products Segment with its strong position in the European aluminium processing industry sold 95,000 tons of products (+11% y/y), replying to the high demand for aluminium components. In effect it generated PLN 1,818 million sales revenue (+42% y/y), including PLN 866 million on foreign sales (+41% y/y), mainly on the German and Italian markets, as well as the markets of Central and Eastern Europe.

A broad assortment of products and differentiated customer base helped the Company cope in the difficult market conditions of 2021. The Segment availed of the strong demand to increase the share of processed and high-margin products in the product portfolio, and also developed its relationships with end users, with particular emphasis on buyers with advanced cooperation standards and quality requirements. The Segment has focused on innovative solutions and environmental aspects. Similarly as in the recent years, a major factor developing sales in 2021 was supporting export markets, particularly those largest ones for the EPS, as well as maximum utilisation of the potential of foreign trading companies (Germany, the Czech Republic, Italy). Therefore, export sales share grew to 40% in 2021.

+42%

annual growth of sales revenue

+41%

annual growth of export sales

	2019	2020	2021
Sales revenue (PLN million)	1,251	1,280	1,818
of which foreign sales (PLN million)	575	494	866
Share of foreign sales in sales revenue (%)	49.3	52.7	53.1
Sales by volume (thousands of tons)	81	85	95

Grupa Kęty S.A. member of national and international associations

The Extruded Products Segment, represented by the corporate brand of Grupa Kęty S.A., manufactures aluminium profiles and components. It is a leader of the sector in Poland, with market share estimated at about 25%. It also has a strong position in the European aluminium industry. The Segment is based in Kęty, but its plants and sales offices are also located in other places in Poland and abroad. In Ukraine there is a modern press shop – Alupol LLC, and in Slovenia – AK EMMI which provides advanced machining and surface treatment of aluminium profiles. The Segment runs business through three foreign offices, in Germany, the Czech Republic and in Italy. The production capacity of the Extruded Products Segment is now 96,000 tons a year, and comprises also other processes apart from extrusion, which is the main activity of the company. The Segment has 13 engineering lines for extrusion, including billet production as well as profiles machining and surface treatment plants. The offered services comprise: anodising, coating, welding and complete fabrication of extruded products. The production capacity of the Segment enables the supply of various branches of industry with aluminium profiles and components, and these include the most progressive ones, such as construction, automotive, transport, railway, electrical engineering, defence, household equipment, advertising, and tourism industries.

The basic business of Aluminium Kety Emmi has continuously focused on machining and surface treatment, as well as development of components. The varied engineering capacity enables AK Emmi to participate in the projects of many sectors, based on the highest quality standards. The customers of AK Emii are the manufacturers of white goods (such as refrigerators, washing machines and others), furniture, medical equipment, electric goods. Also for several years the company has been performing contracts for the supply of components to the established, prestigious brands of vehicles. Currently, AK Emmi has been boldly entering new areas of the automotive sector, i.e. innovative e-mobility products. The key recipient is the largest contract manufacturer of vehicles in the world. The value of sales revenue of the Slovenian company amounted to 36.8 million EUR in 2021.

In 2021, AK Emmi has been a subsidiary of Grupa Kęty for 5 years. The business activity of AK Emmi complies with the EPS strategy of building a strong brand sought for by the manufacturers of speciality aluminium products. Possession by the EPS of a plant providing specialised profiles machining and surface treatment puts the organisation at a more attractive position on the market. On the other hand, following the acquisition, AK Emmi gained not only a new owner but mainly a partner ensuring the company development by way of financial and subject-matter support. The turnover of AK Emii within Grupa Kęty has been systematically growing, whereas the synergy has brought advantages to both companies.

Alupol LLC completed the year 2021 fully executing the budget plan. The sales volume within the processing service was achieved in whole, whereas sales to internal market observed a significant surplus compared to the budget assumptions. The company also generated EBITDA on the level assumed in the budget for 2021. The result was achieved despite difficult market situation in Ukraine, as business development was hindered by the pandemic, high energy and materials prices increases, higher costs of production and imposing of an additional customs duty on aluminium by Russia. Throughout the year, the plant was operating without any downtimes and the production capacity of Alupol LLC’s press was fully utilised. For several years Alupol LLC has been providing production services to Grupa Kęty based on the so called ‘processing agreement’. Such relationship, particularly in the situation of increased demand, is favourable to both companies. Within the agreement Grupa Kęty transferred to Ukraine some of the orders from the overloaded presses in Kęty. That resulted in practically complete utilisation of the production capacity of Alupol LLC’s press and execution of budget assumptions. Invariably, the major recipient of Alupol LLC aluminium profiles is the construction business, but the number of new customers from the local market has been growing in Borodianka along with the number of dies operated.

Green boom

The strongest of trends observed recently in the European extruded products industry is the ‘green boom’. A perceivable change in the business model has been going on. Companies implement costly capital expenditure projects, which are focused not only on production capacity increase but also improvement of technology. A growing number of companies have been striving towards sustainable development and introducing a series of environmentally-friendly solutions. Manufacturers avail of raw materials fit for recycling and renewable energy sources, or lower their carbon footprint. Projects are in progress to reduce aluminium impact on the environment, as far as possible.

Grupa Kęty

Corporate site

In 2021, the Extruded Products Segment focused mainly on the improvement of efficiency of the assets possessed – increased and optimised use of processing capacity by the operated equipment and machinery. Last year, major modernisation works were performed at the Aluform Tychy plant, i.e. installation of gas and induction heaters in 16 MN and 44 MN presses.

In effect, 4,000 tons of production capacity was generated. Moreover, the company commenced the performance of a major capital project planned for 2022 under the 2021–2025 Strategy, i.e. the construction of a new hall and installation of two extrusion lines with 20 NM and 40 MN presses, so as to increase the production capacity to 120,000 tons.

The planned investments support mainly the sector of transport vehicles. The new presses, and specifically the 40 MN one, will be used in the production of profiles for the automotive business (complex aluminium products of special mechanical properties intended for crumple zone control, and bodywork structures). Proper configuration of the new presses (tooling and parameters setup) will also enable extruding profiles for construction business customers and for other market segments, e.g. electrical engineering.

Investments at the Advanced Aluminium Products Plant [ZZPA] concentrated on the improvement of effectiveness and extension of the area of highly-processed products manufacturing. The ZPPA plant has also been gradually furnished with state-of-the-art equipment to improve the process capacity and enable production costs saving, with simultaneous maintenance of high quality products. Systematic automation and robotisation of workstations has been pending.

For several years now the EPS has been consequently building its position of a major supplier in the prestigious sectors of Hi-Tech products. All the investment and sales activities of the Company focus on products which require speciality equipment, expert know-how, and compliance with restrictive quality procedures. Such assumed direction supports the development of the Company and maintenance of competitive advantage. A key role in the strategy is played by the in-house Research and Development Centre, employing professional staff and furnished with modern controls and instrumentation. The R&D Centre is a place where hundreds of standard tests are carried out every day to release products for delivery, but it also acts as scientific facilities for the innovative projects carried out by the EPS, including creation and implementation of new technologies, as well as application of technical novelties and inventions.

In that regard, the R&D Centre activities in 2021 concentrated on:

continuous extension the assortment of sections used in automotive industry and intended for crumple zone control and bodywork structures;
production processes optimisation, consisting in laboratory testing of new parameters of, for example, thermal treatment, which results in the improvement of production performance and reduces energy consumption by the process.

The works have been carried out in cooperation with established scientific and research institutions, such as: the Light Metals Institute in Skawina or the AGH University of Science and Technology in Kraków. With such business approach and performance of many R&D projects, Grupa Kęty may closely cooperate with renowned brands in the automotive industry and the transport sector.

Market environment

Aluminium Systems Segment