Starke Cashgenerierung, operative Disziplin und strukturelle Kosteneinsparungen kompensieren schwache Nachfrage und Preisdruck und stützen 2026 robuste Margen sowie disziplinierten Schuldenabbau.

Geschäftsergebnisse zeigen sich robust und entsprechen Erwartungen

Trotz der weltweit anhaltend verhaltenen Industrienachfrage, des Anstiegs chinesischer Exporte und eines schwachen Preisumfelds entsprach die Performance von RHI Magnesita 2025 den Prognosen. Treiber dieser Perfomance waren die disziplinierte Umsetzung der vom Management eingeleiteten Selbsthilfemaßnahmen und eine starke Geschäftsentwicklung im zweiten Halbjahr.

Das bereinigte EBITA belief sich auf 373 Mio. €, die bereinigte EBITA-Marge lag bei 11,1 % (2024: 11,7 %) und spiegelte den Preisdruck und die Fixkostenunterdeckung im ersten Halbjahr wider. Der bereinigte Gewinn pro Aktie verringerte sich auf 4,18 € (2024: 5,32 €). Der Umsatz betrug 3,4 Mrd. € und war im Jahresvergleich um 3 % bzw. währungsbereinigt um 1 % rückläufig, während sich das Absatzvolumen um 2 % verringerte. Mit einer Cash Conversion von 105 % (2024: 103 %) und einem Free Cashflow von 214 Mio. € zeigte sich die Cashgenerierung weiterhin stark.

Nach Abschluss der Akquisition von Resco im Wert von 391 Mio. € im Jänner 2025 kam es zu einer Erhöhung der Nettoverschuldung auf 1,5 Mrd.€. Infolge der Fokussierung des Unternehmens auf Schuldenabbau ergab sich zum Jahresende ein Verschuldungsgrad von 2,9x Nettoverschuldung zu Pro Forma bereinigtem EBITDA, womit die Prognose von 3,0x übertroffen wurde.

CEO Stefan Borgas und CFO Ian Botha über die Business-Performance von RHIM im Jahr 2025:

Operative Effizienzsteigerungen und strategische Fortschritte

RHI Magnesita erzielte mit der Umsetzung von Kostensenkungsinitiativen für das operative Geschäft, Vertriebsgemeinkosten und Netzwerkoptimierung im Jahr 2025 nachhaltige Einsparungen, die schwächere Preise und die Fixkostenunterdeckung weitgehend kompensieren konnten. Die vom Management implementierten Selbsthilfemaßnahmen sind struktureller Natur und werden nachhaltige, über temporäre Kostenreduktionen hinausgehende Einsparungen bei den Fixkosten bringen und damit die Resilienz des Unternehmens in den kommenden Jahren weiter stärken.

In Nordamerika erzielte RHI Magnesita einen deutlichen Umsatzzuwachs von 22 % auf 863 Mio.€ unterstützt durch die Akquisition von Resco, die im Zeitraum von elf Monaten 184 Mio. € zum Umsatz und 25 Mio. € zum bereinigten EBITA beitrug. Die Integration von Resco verläuft plangemäß und stärkt RHI Magnesitas „Local-for-local“-Produktionsstrategie am strategisch wichtigen US-amerikanischen Markt.

Während M&A weiterhin einen strategischen Grundpfeiler für RHI Magnesita darstellt, liegt der operative Fokus des Unternehmens kurzfristig auf Integration, Synergieeffekten und Schuldenabbau, um die Wertschöpfung aus den jüngsten Transaktionen sicherzustellen und gleichzeitig disziplinierte Kapitalallokation zu gewährleisten.

Ausbau des 4PRO-Modells und starke Recycling-Performance verbessern Wettbewerbsposition

Ein wesentlicher Treiber der Geschäftsentwicklung war 2025 der laufende Roll-out des 4PRO-Geschäftsmodells. RHI Magnesita erneuerte langfristige Verträge mit Schlüsselkunden und sicherte sich vier neue Green-Steel-Verträge, während 4PRO gleichzeitig erfolgreich auf die Industrial-Segmente ausgeweitet wurde. Durch die Bündelung von Prozessoptimierung, Kreislaufwirtschaft, Technologie und kundenorientierten Serviceleistungen schafft 4PRO ein einzigartiges Angebot und stärkt damit Kundenbindung, unterstützt wertorientierte Preisgestaltung und verbessert die Vertragstransparenz.

Nachhaltigkeit bleibt ein fester Bestandteil der Strategie von RHI Magnesita; das Jahr 2025 war dabei durch weitere Innovationen und den Ausbau nachhaltiger Produktangebote geprägt. Dies stellt nach wie vor ein wichtiges Unterscheidungsmerkmal dar, da Kunden in Hard-to-abate-Sektoren nach Möglichkeiten suchen, die zur Reduktion ihrer CO₂-Emissionen beitragen. Mit einer Rekord-Recyclingquote von 15,9% (2024: 14,2 %) hat RHI Magnesita sein globales Ziel von 15 % übertroffen. Recycling wird auch in Zukunft dazu beitragen, resilientere Margen zu erzielen, Rohstoffabhängigkeiten zu senken, die CO₂-Reduktion zu unterstützen und so die Wettbewerbsposition von RHI Magnesita zu stärken.

Ausblick 2026: Fokus auf Cashgenerierung, Synergieeffekte und Schuldenabbau

Auch 2026 ist mit anhaltend herausfordernden Marktbedingungen zu rechnen; die Stahlendmärkte befinden sich auf einem konjunkturbedingten Tiefstand und in den Auftragsbüchern zeichnet sich kurzfristig keine Nachfrageerholung ab. Dennoch fokussiert RHI Magnesita weiterhin auf die Annualisierung struktureller Kosteneinsparungen und Synergien aus der Akquisition von Resco, eine anhaltend starke Cashgenerierung, den weiteren Abbau der Nettoverschulung und eine Reduktion des Verschuldungsgrads auf 2,6x bis zum Jahresende sowie auf eine disziplinierte Kapitalallokation. Durch Regionalisierung, operative Effizienz und weitere Fortschritte bei Recycling und leistungsorientierten Lösungen stärkt RHI Magnesita seine Position. Das Unternehmen setzt weiterhin auf Kostendisziplin und ein Cashflow generierendes Geschäftsmodell. RHI Magnesita verfügt bei einer möglichen Markterholung über eine signifikante operative Hebelwirkung.

Stefan Borgas, Chief Executive Officer, dazu:

„Mit unseren entschlossenen, von unseren Selbsthilfeinitiativen unterstützten Turnaroundmaßnahmen ist es uns gelungen, im zweiten Halbjahr eine starke und nachhaltige Steigerung unser Geschäftsentwicklung zu erzielen, und das in einem äußerst herausforderndem Marktumfeld. Während das Management auf den Turnaround der Geschäftsentwicklung fokussiert war, wurden ebenso wichtige strategische Fortschritte realisiert. Die Integration von Resco und die Synergieeffekte sind auf Kurs, die Recyclingquoten sind in fast allen Regionen gestiegen und unsere digitale Transformation schreitet gut voran. Auch wenn wir noch keinen deutlichen Rückenwind vom Markt spüren, erwarten wir, dass unsere Selbsthilfemaßnahmen und strategischen Fortschritte 2026 die Geschäftsentwicklung und weitere operative und finanzielle Verbesserungen vorantreiben.

Ich möchte allen MitarbeiterInnen, KundInnen, PartnerInnen und AktionärInnen für ihr anhaltendes Vertrauen danken. Mit unserer verstärkten globalen Präsenz, unserer strengen operativen Disziplin und unserer klaren strategischen Ausrichtung sind wir überzeugt, dass RHI Magnesita trotz anhaltenden Gegenwinds den Weg für weitere Erfolge ebnet.”

Die vollständigen ungeprüften Ergebnisse und die Investorenpräsentation finden Sie im Regulatory News Service (RNS) der Londoner Börse und auf der Website des Unternehmens: RHI Magnesita | Regulatory News, Reports & Presentations

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RHI Magnesita, the leading global supplier of high-quality refractory products, systems and solutions, today provides an update on trading for the ten months ended 31 October 2025 (the “Period”).  Given the strong second-half weighting of earnings, this update covers the four months from July to October 2025.

Trading

The Group delivered the expected improvement in performance over the four months from July to October, in line with full-year guidance.

Adjusted EBITA for the four months was €136 million, representing a 12.7% margin, significantly ahead of the run-rate in H1 2025 (six months ended 30 June 2025 of €141 million, 8.4% margin), despite the third quarter typically being a seasonally weaker period due to northern hemisphere summer breaks.

Steel volumes for the period remained weak and broadly consistent with full-year guidance, reflecting subdued but stable overall demand, with only modest improvement compared to the first half. Demand for high-quality steel for the automotive sector was particularly soft in western markets. The Group saw growth in the Period in India, META (Middle East, Africa and Türkiye), with European demand contracting further. Market share in India was re-established during the Period, as expected.

The Industrial project order book has improved throughout the last months, in line with guidance provided at the H1 2025 results, with clear visibility for the remainder of 2025. High-margin industrial projects are however still at a low point, with order volumes around 40% below recent years. The concentration of industrial order delivery in H2 is caused by seasonality and customers shifting orders.

The pricing environment remains highly competitive, particularly in markets with overcapacity, such as China, and in regions heavily supplied by Chinese exports, including India, East Asia and the Middle East.  Small price increases were nevertheless achieved as our customers continue to value our local-for-local supply, the value-creating 4PRO contracts and innovation pipeline.

The Group’s cost efficiency programmes remain solidly on track, with expected SG&A reductions and fixed cost savings from two plant closures in Germany in line with previous full-year guidance. These measures account for the vast majority of the margin improvement in the Period.

Earnings growth from the former Resco plants is progressing well, with integration advancing smoothly and synergies being delivered in line with expectations. The integration is enabling the Group to generate enhanced benefits from its North American footprint. US local-for-local production has increased from 50% to 65% in 2025 and is expected to exceed 75% in H2 2026. While increased US local production has mitigated the Group’s overall tariff exposure, more recent headwinds have emerged with tariffs on raw materials and finished goods exported from Brazil to the US.

Backward integration margins remain near historical lows, at 1.1% year-to-date, as a result of very low raw material pricing across most categories. Further action around cost reduction and portfolio optimisation are being implemented in the raw materials plants and mines to improve earnings from backward integration stepwise over the next two years.

Financial Position

Working capital increased temporarily in the Period, to support delivery of the stronger Q4 order book. The booked project deliveries in the remainder of the year, together with the seasonal peak sales in the cement industry, will enable the Group to de-lever during Q4 to approximately 3.0x by year-end.

Outlook

The Group remains on track to deliver the full-year Adjusted EBITA of €370-390 million, supported by market share recovery in India and META, executed management initiatives in cost reduction and the seasonal recovery expected in China. The weak US Dollar and Indian Rupee continue to weigh on reported financial performance.

The current industrial order book, in particular, underpins expectations that the improved performance achieved in H2 2025 will continue into H1 2026, with the modest pricing benefits retained. Nevertheless, end-markets demand especially in the steel industry remains at a cyclical low, and a rapid normalisation is not anticipated.

Global trade update:

• The European Commission proposes cutting by almost half its tariff-free steel import quota to support onshoring steel production volumes. While the exact timing in 2026 is still uncertain, resultant higher steel production in-region could stabilise refractory demand in Europe.
• Brazil has officially launched an investigation into potential duty protection for refractory materials. The outcome and timing is uncertain at this point.
• With strong market positions in both regions and a well-invested local network, this could become a positive development for RHI Magnesita in late 2026 or 2027.

Stefan Borgas, Chief Executive Officer of RHI Magnesita, said:

“RHI Magnesita has delivered the expected step-up improvement through the second half of 2025 by systematically implementing its self-help actions. This is despite subdued demand conditions. The Group has successfully executed cost reduction initiatives in all cost categories, progressed plant closures, and captured synergies from the Resco acquisition. Market share in India has been re-established, and modest pricing discipline has supported results despite intense competition. I would like to thank the RHI Magnesita-team globally for this outstanding operational performance. Looking ahead, our self-help actions and innovation projects underpin confidence that the momentum from the second half of 2025 will carry into the first half of 2026.”

For further enquiries, please contact:

Alexander Ordosch, Head of Investor Relations
Tel +43 699 1870 6162
E‐mail: Alexander.Ordosch@rhimagnesita.com 

Media:
Hudson Sandler
Tel +44 020 7796 4133
E-mail: rhimagnesita@hudsonsandler.com

About RHI Magnesita

RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with over 20,000 employees in 68 main production sites (including recycling facilities), 12 raw material sites and more than 70 sales offices. RHI Magnesita intends to leverage its leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefiting from more dynamic economic growth prospects.

RHI Magnesita offers investors EBITDA and free cash flow comparable to FTSE 100 peers, the highest free cash flow yield in the UK industrials sector, a compelling M&A growth story and high operational gearing to market recovery. The Group seeks to allocate capital to maximise value generation for shareholders. After maintenance capex and dividend, M&A, organic investments and buybacks compete for capital. The global refractory industry remains fragmented and the M&A pipeline presents an opportunity to continue a value-accretive consolidation strategy.

The Group is listed within the Equity Shares (Commercial Companies) category (“ESCC”) of the Official List of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com

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RHI Magnesita N.V. is pleased to announce the appointment of Alexander Ordosch as Head of Investor Relations, effective October 1, 2025.

Alexander has been with RHIM for many years and has already made a strong impact through his roles as Strategy Manager and European Plant Network & Restructuring Project Manager. In these roles, he successfully led major production network optimization initiatives across the European plant network, supported M&A and financial planning, and played a key role in advancing RHIM‘s Decarbonization Strategy.

Before joining RHI Magnesita, Alexander worked as a Commodity Analyst at CRU Group in London, where he focused on the European steel market. He holds a master’s degrees with distinction in Metals & Energy Finance (Imperial College London) and Economic Geology (Montanuniversität Leoben).

With his extensive experience, strong analytical skills, and strategic mindset, Alexander is well positioned to further develop RHI Magnesita’s investor relations activities and strengthen dialogue with stakeholders.

RHI Magnesita looks forward to working with Alexander in his new role and continuing to build strong and transparent relations with the investment community.

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Stahlnachfrage stabil, Verschiebung von Projekten im Industrial-Bereich belasten Profitabilität im ersten Halbjahr

RHI Magnesita, der weltweit führende Anbieter von Feuerfestprodukten, -systemen und -lösungen, veröffentlicht heute die ungeprüften Halbjahresergebnisse zum 30. Juni 2025.

CEO Stefan Borgas und CFO Ian Botha über die Ergebnisse des Unternehmens im ersten Halbjahr:

Ergebnisse spiegeln herausforderndes Marktumfeld wider

Der Umsatz fiel um 3 % auf 1.677 Mio. € (H1 2024: 1.728 Mio. €), wobei Volumen und Preisdruck im Stammgeschäft teilweise durch den Beitrag der kürzlich erworbenen Resco kompensiert werden konnten. Das bereinigte EBITA sank auf 141 Mio. € (H1 2024: 190 Mio. €), die bereinigte EBITA-Marge lag bei 8,4 % und war durch einen ungünstigeren Produktmix im Industrial-Geschäft, rückläufige Nachfrage im Bereich Glas sowie den Aufschub von Investitionsentscheidungen bei Kunden aus der Nichteisenmetallindustrie angesichts der angespannten Situation im globalen Handel und Wettbewerbsdruck in Schlüsselmärkten beeinflusst.

RHI Magnesita konnte trotz des Aufbaus von Lagerbeständen in Vorbereitung auf höhere Kundennachfrage im zweiten Halbjahr eine starke Cash Conversion erzielen. Die Nettoverschuldung erhöhte sich infolge der Akquisition von Resco auf 1.583 Mio. €, was in einem Verschuldungsgrad von 3.1x resultierte. Bis Jahresende 2025 wird eine Reduktion des Gearing auf rund 2,8x erwartet.

Strategische Akquisitionen und Netzwerkoptimierung

Im Jänner 2025 schloss RHI Magnesita die Akquisition von Resco im Wert von 390 Mio. € ab und stärkte damit die Position des Unternehmens im nordamerikanischen Markt. Resco trug in den ersten fünf Monaten der Konsolidierung 90 Mio. € zum Umsatz und 11 Mio. € zum bereinigten EBITA bei. Die Integration schreitet gut voran und das Geschäft in den USA zeigt sich weiterhin resilient.

Im Juni vereinbarte RHI Magnesita mit BPI, Inc., ein Recycling Joint Venture einzugehen, wodurch die Plattform für Kreislaufwirtschaft in Nordamerika ausgebaut werden soll. Auf Basis des bewährten Geschäftsmodells in Europa rechnet das Unternehmen mit deutlichen Kosten- und Nachhaltigkeitssynergien. In einem Umfeld mit hohen Zöllen wird erwartet, dass Rohstoffrecycling innerhalb der US-Grenzen eine zunehmend wichtige Rolle spielt; gleichzeitig stellt der Einsatz von rückgewonnenem Feuerfestmaterial für RHI Magnesita im Vergleich zu neu abgebauten Rohstoffen den schnellsten Weg zur Reduktion von CO₂-Emissionen dar. Diese Entwicklungen sind Teil der langfristigen Wachstumsstrategie von RHI Magnesita, während der kurzfristige Fokus weiterhin auf Integration, Netzwerkoptimierung und Schuldenabbau liegt.

Nachhaltigkeit und Sicherheit

RHI Magnesita ist weiterhin auf Kurs, um die Nachhaltigkeitsziele für 2025, die die Bereiche Gesundheit und Arbeitssicherheit, CO₂-Emissionsintensität, Energieverbrauch und Recycling umfassen, zu erreichen oder zu übertreffen. Parallel dazu hat RHI Magnesita im Rahmen der EU-Richtlinie zur Nachhaltigkeitsberichterstattung (CSRD) bereits neue Ziele für 2030 festgelegt. Das Unternehmen konnte sein Ecovadis Rating 2025 auf 79 verbessern (2024: 76) und zählt damit zu den Top 3% weltweit.

Für seine Kunden bleibt RHI Magnesita ein führender Technologiepartner und entwickelt Green-Steel-Technologien, die potenziell deutlich zur Reduktion der weltweiten CO₂-Emissionen beitragen können, da die Emissionsintensität in der Stahlproduktion sehr hoch ist.

Stefan Borgas, Chief Executive Officer von RHI Magnesita, zu den Ergebnissen: „RHI Magnesita bewegt sich weiterhin in einem extrem herausfordernden externen Marktumfeld: So haben das konjunkturbedingte schwächere Projektgeschäft im Industrial-Bereich, Unsicherheiten im Zusammenhang mit den Zollverhandlungen, währungsbedingter Gegenwind, aggressiver Wettbewerb und die anhaltend schwache Nachfrage der Endmärkte zu den deutlich geringeren Margen im ersten Halbjahr 2025 beigetragen. Ungeachtet dieser externen Faktoren sind wir von unserer Performance enttäuscht und werden entschlossen die dringend notwendigen Schritte setzen, um Verbesserungen zu erzielen. In der zweiten Jahreshälfte erwarten wir in bestimmten Regionen Marktanteilsgewinne sowie verbesserte Margen auf Basis bereits umgesetzter Maßnahmen, die das Projektgeschäft im Bereich Industrial sichern, Preise erhöhen und Kosten senken sollen; dazu zählen auch zwei bereits durchgeführte Werksschließungen in Europa. Für das Gesamtjahr haben wir unseren Ausblick für das bereinigte EBITA auf 370 Mio. bis 390 Mio. € herabgesetzt, um die unter den Erwartungen liegende Performance und Wechselkursentwicklungen im ersten Halbjahr 2025 zu berücksichtigen. Aufgrund unseres aktiven M&A-Programms hat sich das Gearing auf 3,1x EBITDA erhöht, wir gehen jedoch davon aus, dass es im Verlauf des zweiten Halbjahres und 2026 zu einem Rückgang kommt. Wir sind nach wie vor überzeugt, dass unsere Strategie, im fragmentierten globalen Feuerfestmarkt durch M&A zu wachsen, der mit Abstand beste Weg ist, um in einem wachstumsschwachen Umfeld Mehrwert für unsere Aktionäre zu schaffen, und setzen dabei auf unsere Stärken als Branchenführer.”

Ausblick 2025

In einem anhaltend herausfordernden Marktumfeld wird sich die schwache Nachfrage der Endmärkte voraussichtlich bis ins zweite Halbjahr 2025 fortsetzen. Im Bereich Stahl bleibt die Feuerfestnachfrage daher auf niedrigem Niveau, jedoch wird im zweiten Halbjahr auf Basis der Auftragseingänge und der üblichen Saisonalität mit einer leichten Verbesserung gerechnet. Das äußerst kompetitive Preisumfeld wird voraussichtlich andauern, jedoch strebt das Unternehmen für das zweite Halbjahr gezielte Preiserhöhungen an. Im Industrial-Geschäft ist das Unternehmen jetzt zuversichtlich, Projekte im zweiten Halbjahr, vor allem für Nichteisenmetall-Kunden, abzuwickeln.

Im zweiten Halbjahr 2025 sollte das bereinigte EBITA von Managementmaßnahmen zu Preiserhöhungen, Kostensenkungen inklusive Werksschließungen, Einsparungen bei Vertriebsgemeinkosten und Fixkosteninitiativen profitieren. Erwartet wird nun ein bereinigtes EBITA für das Gesamtjahr zwischen 370 Mio. € und 390 Mio. €, bei einer durchschnittlichen Marge von rund 10,5 bis 11 %. Das Gearing soll vom erwarteten Spitzenwert von 3,1x bis Jahresende auf rund 2,8x zurückgehen.

Über RHI Magnesita

RHI Magnesita ist der Weltmarktführer bei hochwertigen Feuerfestprodukten, -systemen und -serviceleistungen, die für industrielle Hochtemperaturprozesse über 1.200 °C in einer Vielzahl von Industrien, darunter Stahl, Zement, Nichteisenmetalle und Glas, unverzichtbar sind. Durch die vertikal integrierte Wertschöpfungskette, die vom Rohstoff bis zum Feuerfestprodukt und leistungsorientierten Gesamtlösungen reicht, bedient RHI Magnesita Kunden in nahezu allen Ländern weltweit. Das Unternehmen beschäftigt rund 20.000 MitarbeiterInnen an 65 Hauptproduktions-, 12 Recycling- sowie mehr als 70 Vertriebsstandorten. RHI Magnesita strebt den Ausbau der Führungsposition in Bezug auf Umsatz, Größe, Produktportfolio sowie geografischer Präsenz an – insbesondere in jenen Regionen, die wirtschaftliche Wachstumsaussichten versprechen.

Die Aktie des Unternehmens notiert in der Kategorie Equity Shares (Commercial Companies “ESCC”) der Official List der Londoner Börse (Symbol: RHIM) und gehört dem FTSE 250 Index an, mit einer Zweitnotierung an der Wiener Börse. Weitere Informationen finden Sie unter: www.rhimagnesita.com

Rückfragen & Kontakt: 

Abhijit Borah 
Head of Global Communications & Public Affairs 
Abhijit.borah@rhimagnesita.com
+43 699 1870 6728

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RHI Magnesita, the leading global supplier of high-grade refractory products, systems, and solutions, and BPI, Inc., a renowned US based leader in minerals processing, including refractory raw materials and specialty products, are pleased to announce a transformative joint venture to expand circular economy initiatives and accelerate sustainability across North America.

The strategic partnership combines RHI Magnesita’s (RHIM) global refractory expertise with BPI, Inc.’s (BPI) robust US infrastructure, local sourcing, and technical processing capabilities. This collaboration is set to create a powerful platform for innovation in circular raw material processing and recycling. It aims to significantly enhance the sustainability of the refractory industry, which is essential to the production processes for cement, steel, aluminum, and many other industrial producers in the North America region.

Key Highlights of the Joint Venture:

• Proximity to customers: with a combined 20 plant locations across PA, OH, MO, NC, AL, CA, IN, and Quebec, RHI Magnesita and BPI are strategically positioned close to customers, allowing for the delivery of locally sourced products and solutions, effectively shortening supply chains as a resilient partner.
• Enhanced portfolio: the combined companies possess technical and analytical services, expanded access to high-quality domestically sourced circular raw materials, and expert sales teams with a solutions-mindset, from raw materials to finished goods.
• Innovation & sustainability:advanced, in-house R&D teams will collaborate to explore and develop state-of-the art solutions that will improve safety, endurance and efficiency, while decreasing the collective carbon footprint.

The newly announced partnership represents an innovative move toward enhancing sustainable refractory while also providing a strategic platform for the sourcing of domestic refractory raw materials in North America.

Stefan Borgas, CEO RHI Magnesita, commented on the joint venture, “At RHI Magnesita, we are committed to leading the way in sustainability and innovation. This partnership with BPI, Inc. is a testament to our dedication to creating a more sustainable future and advancing our circular economy strategy. By joining forces, we strengthen our ability to turn spent materials into future value, setting an example of how innovation and collaboration can drive real progress for our customers, our business, and the planet.”

Joe Quigley, BPI President, also shared, “At BPI, we are committed to providing high-quality mineral products. Partnering with RHIM will expand our portfolio and enhance our efforts to offer circular solutions. We are excited about the progress our combined companies will achieve for a better future.”

The joint venture is subject to customary closing conditions and is expected to be completed in H2 2025.

About RHI Magnesita

RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with over 20,000 employees in 65 main production sites (including raw material sites), 12 recycling facilities and more than 70 sales offices. RHI Magnesita intends to leverage its leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefiting from more dynamic economic growth prospects.

The Group is listed within the Equity Shares (Commercial Companies) category (“ESCC”) of the Official List of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com

About BPI, Inc.

BPI, Inc. is an U.S.-based leader in mineral processing, including refractory raw materials and specialty mineral products, serving the steel, foundry, aluminum, and cement industries. With advanced processing facilities and a strong focus on sustainability, BPI, Inc. is at the forefront of innovation in material recovery and recycling and is a trusted partner to its customers. BPI operates 7 recycling facilities, 1 office and in-house R&D lab across 4 states, including PA, OH, AL and IN with approximately 100 employees.

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RHI Magnesita, the leading global supplier of high-grade refractory products, systems and solutions, today provides an update on trading for the three months to 31 March 2025 (“Q1”).

Downside risks to the 2025 trading outlook have increased, driven by a weak outlook for H1 performance and rising global trade tensions, which could negatively affect the Group’s end markets.

Q1 trading

First quarter trading conditions became more challenging, reflecting lower sales volumes, a continued decline in project business in the glass and non-ferrous metals sectors worldwide and lower pricing for cement and steel markets in India and the Middle East.

EBITA margins in the first quarter were lower, as expected, impacted by a combination of lower volumes in high-margin project business, weaker finished goods pricing and higher cost of purchased raw material.

Reflecting the demand backdrop, the Group continues to operate its plants at lower levels of capacity utilisation compared to Q4 2024, with fixed cost under-absorption further weighing on margins. As part of its ongoing Network Optimisation Programme (“NOP”), the Group has announced the closure of its Wetro plant in Germany. Alongside the NOP, management has initiated additional cost saving measures targeting both Cost of Goods Sold and Selling, General & Administration expenses.

In response to higher unit costs, a price increase programme is being implemented to restore margins over the remainder of the year, although securing increases is likely to be more challenging in the current market environment. In particular, India and West Asia markets are experiencing elevated competitive pressure from low-cost imports of refractories from China and overcapacity that has been built in India recently by international and domestic refractory competitors, impacting both margins and sales volumes.

Financial position

As expected, net debt increased to €1.6 billion as at 31 March 2025, primarily due to the completion of the Resco acquisition and the payment of the remaining €346 million of cash proceeds. This was partially funded by a new €200 million syndicated term loan.

Working capital rose modestly, in line with expectations of increased sales in Q2. Guidance for year-end working capital intensity remains at c.24%, excluding any potential impact from global supply chain disruptions stemming from tariff changes.

Following the payment related to the Resco acquisition, gearing – measured as the ratio of net debt to Pro Forma Adjusted EBITDA – is expected to be c.2.9x at the half year, above the Group’s target range of 2.0 to c.2.5x. Gearing is anticipated to reduce through the second half and, based on current earnings and cash flow expectations, would return towards c.2.5x by year end.

Strategic developments

RHI Magnesita pursues a local for local production strategy and benefits from vertical integration in key raw materials. This provides some protection against potential adverse transactional impacts arising from tariffs, compared to other industry participants who rely on imported raw materials from third party producers.

The Group’s growth strategy is primarily focused on M&A. In Q1, the Group completed the planned €391 million acquisition of Resco, marking a significant strategic milestone in strengthening its presence in the North American market. A key benefit of the Resco transaction is the opportunity to increase domestic US production of many products which are currently imported to the US. However, the relocation and ramp-up of production to fully capture these benefits will take approximately 18 months, in line with normal industrial capacity projects.

Outlook

First quarter trading conditions were weaker as expected, with a reduction in both revenues and margins in the period. Performance is expected to improve in the second quarter based on the current order book as cost saving initiatives support profits somewhat. With the benefits of price and cost actions weighted towards the latter part of the year, the first half is now expected to contribute 35-40% of full-year Adjusted EBITA, with 60-65% weighted to the second half, also supported by Non-ferrous Metals project volumes postponed from H1.

Whilst the current order book still could allow delivery of full year guidance for Adjusted EBITA to be modestly ahead of 2024 including Resco, the Group is mindful of the elevated risk posed by current macroeconomic volatility. This could impact end market demand and customer production volumes with the additional possibility of instability in global supply chains. The weaker US dollar will also impact earnings from the North America region in euro terms and if the current exchange rate is maintained for the remainder of 2025 this would represent a c.€15 million incremental headwind to Adjusted EBITA.

Stefan Borgas, Chief Executive Officer of RHI Magnesita, said:

“RHI Magnesita continues to navigate difficult market conditions as end markets and customer production volumes remain subdued and as industrial projects are being postponed into the second half of the year. New uncertainties surrounding global trade and tariff arrangements are adding complexity to our planning processes and risk of further project postponements. We have implemented measures to support margins by reducing costs and executing price increases as well as progressing more structural drivers including production network optimisation and the realisation of synergies from recent acquisitions. Guidance for 2025 Adjusted EBITA to be modestly ahead of 2024 is maintained, although downside risks have increased and a step up in profitability in the second half will be required to meet expectations.”

Conference call

A conference call for analysts will be held at 8:15am UK time to discuss the trading update:

AGM

Further to the Notice of Meeting issued on 27 March 2025, the Company will hold its Annual General Meeting (“AGM”) today at 14:00 CET. Voting results from the AGM will be made available shortly after the meeting.

For further enquiries, please contact:

Chris Bucknall, Head of Investor Relations
Tel +43 699 1870 6490
E‐mail: chris.bucknall@rhimagnesita.com   

Media:

Hudson Sandler
Andrew Hayes
Tel +44 020 7796 4133
E-mail: rhimagnesita@hudsonsandler.com

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RHI Magnesita, der weltweit führende Anbieter von Feuerfestprodukten, -systemen und -lösungen, veröffentlichte heute die Jahresergebnisse zum 31. Dezember 2024.

Trotz sehr schwieriger Marktbedingungen, in denen Absatzvolumen (minus 1% im Stammgeschäft) und Preise (minus 6%) unter Druck standen, erzielte RHI Magnesita dank des anhaltenden Fokus auf operative Effizienz und Kostendisziplin operativ und finanziell eine starke Performance. Das Unternehmen konnte trotz der rückläufigen Preisentwicklung das bereinigte EBITA mit 407 Mio. € (2023: 409 Mio. €) stabil halten und die bereinigte EBITA-Marge auf 11,7 % (2023: 11,4 %) verbessern. Der bereinigte Gewinn pro Aktie stieg auf 5,32 € (2023: 4,98 €) und die starke Cashgenerierung von 103 % trug zu einer Reduzierung der Nettoverschuldung um 52 Mio. € auf 1.251 Mio. € bei. Das Gearing blieb mit 2,3x stabil (2023: 2,3x) und bewegte sich innerhalb der vom Unternehmen angestrebten Bandbreite.

Strategische Akquisitionen schaffen Mehrwert

M&A leistete 2024 einen erheblichen Beitrag zur Gesamtperformance, wobei die sechs im Jahr 2023 abgeschlossenen Akquisitionen 77 Mio. € zum bereinigten EBITDA beitrugen, was der Guidance des Unternehmens von rund 80 Mio. € entspricht.

Mit der Akquisition von Refrattari Trezzi im Wert von 5 Mio. € baute das Unternehmen seine Recyclingkapazitäten in Europa 2024 weiter aus. Das im Zuge der Akquisition erworbene Geschäft wurde in das RHI Magnesita Joint Venture MIRECO integriert, sodass sich RHI Magnesitas Anteil an MIRECO auf 55% erhöhte (2023: 51%).

Im Jänner 2025 schloss RHI Magnesita die Akquisition der in den USA ansässigen Resco Group im Wert von 391 Mio. € erfolgreich ab. Der Gesamtwert der M&A-Transaktionen seit 2021 stieg somit auf 1,2 Mrd. €. Mit dieser Akquisition hat das Unternehmen einen wesentlichen Schritt in Richtung Ausbau seiner Präsenz im wichtigen nordamerikanischen Markt gesetzt und treibt somit seine “local-for-local”-Produktionsstrategie weiter voran, indem nun ein bedeutender Teil der Produktion in die USA verlagert wird.

RHI Magnesita hält weiterhin an M&A als langfristigem Treiber fest, 2025 wird der Fokus jedoch vor allem auf der Integration der aktuellen Akquisitionen und der schrittweisen Reduktion des Verschuldungsgrads liegen.

Stefan Borgas, Chief Executive Officer von RHI Magnesita, dazu:  

„RHI Magnesita hat trotz der sehr schwachen Nachfrage in den meisten Märkten weltweit abermals eine solide Performance abgeliefert. Mit 407 Mio. € bewegte sich das bereinigte EBITA innerhalb unserer angestrebten Bandbreite von 400 bis 410 Mio. € und spiegelt die im vierten Quartal erwartungsgemäß starke Performance wider. Wir legen weiterhin höchste Priorität auf Sicherheit, das ist einer unserer Grundwerte.

Mit der Übernahme von Resco haben wir nun die größte Akquisition seit dem Zusammenschluss von RHI und Magnesita 2017 abgeschlossen. In unserem US-Geschäft können wir somit endlich dem Wunsch unserer Kunden nach deutlich umfangreicherer lokaler Produktion nachkommen. Investitionen in das erweiterte Produktionsnetzwerk werden von unserem Team in den USA detailliert vorbereitet. Gesamtrestrukturierungskosten von 60 Mio. € und Investitionen in Höhe von 40 Mio. € sind für den Zeitraum von 2025 bis 2027 geplant; dadurch soll das EBITA 2025 mit 10 Mio. €, 2026 mit 20 Mio. € und danach jährlich mit 30 Mio. € unterstützt werden. Unsere Strategie, in der fragmentierten Feuerfestindustrie – aufbauend auf unseren Stärken als Technologie- und Nachhaltigkeitsführer – durch Akquisitionen zu wachsen, erweist sich als der beste Weg, um Mehrwert für unsere Aktionäre zu schaffen. Wir werden unsere Geschäfte weiterhin konservativ führen, solange sich die Nachfrage rückläufig entwickelt, und dabei unsere strategischen Ziele weiterverfolgen, um langfristig Wertschöpfung zu schaffen.“

Ausblick 2025

Die Entwicklung der globalen Feuerfestindustrie bleibt weiterhin unbeständig, Anzeichen einer baldigen Erholung in den Endmärkten sind derzeit nicht erkennbar. Der wirtschaftliche Wandel in China wirkt sich nach wie vor auf die Lieferketten und Preisdynamik aus. Indien und Ostasien verzeichnen solides Wachstum und die Nachfrage nach zukunftsweisenden Materialien wie Kupfer, Aluminium und Glas bleibt langfristig robust. Gleichzeitig scheint der Marktrückgang in den westlichen Wirtschaften strukturell und möglicherweise permanent zu sein.

RHI Magnesita erwartet ein weiteres Jahr rückläufiger Entwicklungen, geprägt von Preis- und Kostendruck. Trotz des herausfordernden Makroumfelds wird das Unternehmen seine Position als Marktführer mithilfe seiner operativen Effizienz, vertikalen Integration und erweiterten Kundenbasis verteidigen.

Über RHI Magnesita

RHI Magnesita ist der Weltmarktführer bei hochwertigen Feuerfestprodukten, -systemen und -serviceleistungen, die für industrielle Hochtemperaturprozesse über 1.200 °C in einer Vielzahl von Industrien, darunter Stahl, Zement, Nichteisenmetalle und Glas, unverzichtbar sind. Durch die vertikal integrierte Wertschöpfungskette, die vom Rohstoff bis zum Feuerfestprodukt und leistungsorientierten Gesamtlösungen reicht, bedient RHI Magnesita Kunden in nahezu allen Ländern weltweit. Das Unternehmen beschäftigt über 20.000 MitarbeiterInnen an 65 Hauptproduktionsstandorten (inklusive Rohstoffwerken), 12 Recycling- sowie mehr als 70 Vertriebsstandorten. RHI Magnesita strebt den Ausbau der Führungsposition in Bezug auf Umsatz, Größe, Produktportfolio sowie geografischer Präsenz an – insbesondere in jenen Regionen, die wirtschaftliche Wachstumsaussichten versprechen.

Die Aktie des Unternehmens notiert in der Kategorie Equity Shares (Commercial Companies) (“ESCC”) der Official List an der Londoner Börse (Symbol: RHIM) und gehört dem FTSE 250 Index an, mit einer Zweitnotierung and der Wiener Börse. Weitere Informationen finden Sie unter: www.rhimagnesita.com

Rückfragen & Kontakt: 

Abhijit Borah 
Head of Global Communications & Public Affairs 
Abhijit.borah@rhimagnesita.com
+43 699 1870 6728 

Joseph Waldstein
Global Public Relations
Joseph.waldstein@rhimagnesita.com
+43 699 1870 6106

The post RHI Magnesita Jahresergebnis 2024: Starke Margen- und Cashflow-Performance in sehr schwierigem Marktumfeld appeared first on RHI Magnesita.

Acquisition will strengthen customer solutions in North America, with increased local-for-local production and RHIM’s global leading innovation and expertise

RHI Magnesita is pleased to announce the completion of the acquisition of the US-based Resco Group, from an affiliate of Balmoral Funds LLC, a Los Angeles-based private equity firm, and management. The acquisition, for an enterprise value of $410 million (c.€390 million), is the most significant investment by the Group since the merger of RHI and Magnesita in 2017.

A milestone acquisition in North America

The deal marks a major milestone for RHI Magnesita as it focuses on delivering an exceptional customer experience in the important North American region. RHIM’s refractory products are essential to the production processes for cement, steel, aluminium, and many other industrial producers in the region. The addition of Resco Group to the Company’s North American operations will significantly increase local-for-local production, improving supply chain security for critical industries that underpin the economy of the continent.

Elevating customer experience through an enlarged offering

The acquisition will deliver a broad range of benefits to customers, including:

• A significantly enhanced product portfolio: offering a wider range of basic and non-basic products, with applications across multiple industries. The addition of Resco Group will support RHI Magnesita’s strategic growth trajectory in alumina-based refractories.
• Supply security: an increased focus on local-for-local production will result in a reduced reliance on international imports for US customers.
• Improved responsiveness: the combination of RHI Magnesita’s global manufacturing capabilities and an improved local-for-local production footprint will drive logistical efficiencies and enhanced supply chain agility for shorter lead times.
• Sustainability advancements: Resco customers will benefit from RHI Magnesita’s industry leadership in innovation and sustainability as well as circular economy solutions, to support broader industrial decarbonization efforts. RHI Magnesita’s advanced recycling initiatives in particular will play a key role in reducing waste by converting used refractory materials into reusable raw materials.
• Industry expertise: supported by RHI Magnesita’s global leading expertise, Resco Group and RHIM will continue to pioneer new industry standards for the North American region.

Over the coming weeks and months, RHI Magnesita will focus on integrating teams, processes, technology, and resources to ensure a seamless transition and maintain business continuity for the combined entity’s suppliers, customers and other stakeholders. As part of the integration of the networks, RHI Magnesita will also invest into Resco’s plants to further upgrade them, increase capacities, introduce new product lines and improve overall productivity.

Stefan Borgas, CEO of RHI Magnesita, commented:

“The acquisition of Resco marks a significant milestone for RHI Magnesita as we continue to expand our offering in North America, responding to our customers’ evolving priorities while setting the highest industry standards. This deal will deliver a step change for our North American business as we continue to enhance local-for-local production and expand our product offering. Resco is a profitable and cash flow generative business with a strong customer base in the North American petrochemical, cement, and aluminium industries that will immediately add value to RHI Magnesita.

I would like to extend a warm welcome to our new colleagues from Resco. A business is nothing without its people, and the excellent reputation of Resco and its strong performance to date are testament to the hard work of these expert and dedicated professionals. They will join a collaborative international team, working alongside colleagues across the globe to benefit from a diversity of skills, experience, and exceptional career development opportunities at RHI Magnesita. Together, I am confident that we will continue to set new industry standards.” 

Mark Essig, CEO of Resco from 2022 until the sale, commented:

“This transaction marks an exciting new chapter for Resco and our employees. Over our 78-year history, we have built a strong reputation for delivering high-quality refractory products and technical solutions to our customers. Joining RHI Magnesita will allow us to further enhance our capabilities and expand our reach while maintaining our commitment to excellence in customer service. We are grateful for Balmoral Funds’ support during their ownership, which helped strengthen our market position, and we look forward to continuing our growth trajectory as part of RHI Magnesita’s global platform.”

Media:

Abhijit Borah, Head of Corporate Communications & Public Affairs
Tel +43 699 1870 6728
E-mail: Abhijit.Borah@RHIMagnesita.com

Hudson Sandler
Tel +44 020 7796 4133
E-mail: rhimagnesita@hudsonsandler.com

About RHI Magnesita

RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with over 20,000 employees in 67 main production sites (including raw material sites), 12 recycling facilities and more than 70 sales offices. RHI Magnesita intends to leverage its leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefiting from more dynamic economic growth prospects.

The Group is listed within the Equity Shares (Commercial Companies) category (“ESCC”) of the Official List of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com

About Resco

Resco is a producer of shaped and unshaped refractories, including products for use in the petrochemical, cement, aluminium, and steel-making industries. Resco operates seven plants and two raw material sites in the US and two plants in the UK and Canada. Resco’s Rescobond and Rescocast brands are widely used in refining and petrochemical applications by global customers.

Resco recorded unaudited revenues of $252 million in the year to 31 December 2023, with Profit before Tax of $20 million and had Gross Assets of $191 million at 31 December 2023.

About Balmoral Funds

Balmoral is a Los Angeles, CA based private equity fund that was founded in 2005. Balmoral’s objective is to be the financial partner of choice for entrepreneurial and successful C-suite executives and operating advisors creating transformative outcomes in the businesses they co-invest in together. Balmoral has approximately $1.3 billion of assets under management. Balmoral typically invests in companies that have revenues between $30 to $500 million and require equity investments of $10 to $120 million, with the capability of doing more in particularly compelling opportunities.

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RHI Magnesita, the leading global supplier of heat management solutions, today announces a long-term strategic partnership with Capgemini, a global business and technology transformation partner. This collaboration marks an important milestone in RHI Magnesita’s transformation journey and is set to redefine the future of the company’s internal Shared Services through innovation, operational excellence, and digitalization.

A shared vision for transformation

The partnership aims to enhance efficiency, scalability, and customer focus through an integrated Global Shared Services (GSS) model, leveraging Capgemini’s leading expertise in advanced technology and global process design.

“Our partnership with Capgemini is key for achieving the levels of efficiency, innovation and customer service we aspire to,” said Ian Botha, CFO of RHI Magnesita. “Capgemini brings global expertise in process design and transformation. This will help us streamline our shared services operations, adopt best practices and introduce advanced technology and digital solutions, ensuring consistency and scalability across all operations.”

The partnership makes it possible for RHI Magnesita to focus on its core business functions and supports its culture of innovation. For Capgemini, the collaboration is a testament to its capability to drive transformation in industrial manufacturing, further strengthening its leadership in the sector.

One Team Approach to drive success together

At the heart of this partnership lies a commitment to collaboration and inclusivity. By adopting a One Team approach, this seamless integration ensures continuity and opens new opportunities for learning, innovation, and professional development. Employees will benefit from Capgemini’s cutting-edge technologies, best-in-class tools, and a broader network of expertise. This focus on personal growth ensures that the partnership drives not only organizational success but also individual career advancement. “Capgemini is proud to partner with RHI Magnesita in this strategic transformation,” said Dorota Góral-Abram, Head of Southern and Central Europe, Capgemini’s Business Services. “Together, we will deliver a new level of operational excellence, efficiency, and growth.”

The partnership officially commenced on December 1, 2024, with the transition of RHI Magnesita’s Shared Services Operations in Spain, Mexico, India, and China.This move is the first step in a multi-year journey to fully integrate and optimize the Shared Services model of RHI Magnesita. The partnership is expected to drive significant value for both organizations while setting new benchmarks for excellence in the industrial manufacturing sector.

Hear more about the partnership from CEO Stefan Borgas, CFO Ian Botha, Head of Global Business Services Aneta van den Kieboom and Dorota Góral-Abram,  Head of Southern and Central Europe, Capgemini’s Business Services.

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A commentary by Stefan Borgas, CEO, RHI Magnesita

This year has been dubbed “the year of elections”.  By the end of 2024, 64 countries will have or have had new governments or administrations including the EU, US, Japan, UK, France and India. Businesses worldwide are anticipating what the possible policy changes will be and will mean for them. Especially critical industries could become crucial for an economic recovery.

The world has changed

To fully understand the challenges, we must recognize the geo-political disruptions have changed the world. From our global perspective at RHI Magnesita we clearly see that a series of shocks – including the pandemic, regional wars, the rise of protectionism measures on climate change and immigration – have collectively battered long-established supply chains and global trade networks. The industrial sector, especially heavy and basic industry in most global economies has been in stagnation for more than two years; a recovery is not at sight. Service and IT sectors cannot in the long-term balance out the industrial stagnation or even downturn. A prolonged, much more uncertain environment is testing the way we plan and manage global businesses. The global economy of the past 40 years is no more; industries must be prepared to find new answers and solutions.

The mission-critical refractories industry is feeling this seismic shift keenly. Alarm bells should ring with policymakers and industry leaders around the world, if this industry were to suffer materially. 

Refractories are highly engineered materials designed to withstand very high temperatures well in excess of 1,200° C. They coat the inside of blast furnaces, crucibles and kilns which produce steel, aluminium, cement, glass, chemicals and many other materials that make-up the building blocks of modern societies. They are a very small part of the cost base but completely essential to the industrials sector which is the backbone of economic growth.

The continuing demand downturn and its impact

Another year that started with hopefulness for the refractory industry has taken a turn in recent months. Continuing poor macro-economic conditions, new economic policy measures and trade barriers have resulted in a market downturn in almost every geography due to the downturn of user industries. Even regions such as India, Southeast Asia and the Middle East, which we had anticipated to be “bright spots”, have also shown signs of short-term demand weakness.

Western economies are experiencing an industrial recession due to shrinking demand from the construction, transport and machinery sectors. The structural reduction of the industrial sector in China, the largest consumer and producer of metals, glass and cement, has led to an imbalance in world trade. The country is going through a deep structural shift from a supply-driven economy to a demand driven economy – this is painful, it will take time, and it will cost a lot of money, patience and adjusting – for the Chinese as well as for the entire world. Low domestic consumption has accelerated Chinese steel, metals, glass, and refractory exports, which cannot be easily absorbed due to low demand in destination economies.

Some analysts and commentators do not forecast any improvement in the demand situation for at least the next 12-18 months. This would then result in more than three years of continued downturn or industrial recession. Others are even beginning to question whether demand will ever return to prior levels.

The global demand downturn is further complicated by the recent increase in sea freight costs, transit times and reduced freight reliability arising from the Red Sea crisis, low water levels in the Panama Canal and port congestions. Rising bauxite and alumina prices due to a supply shortage for example, have resulted in cost inflations of alumina-based products, to reflect the higher cost of raw materials. The same is about to happen in magnesite based raw materials too. Developed markets continue to face the incremental challenge of labor cost inflation which is still not being absorbed.

With raw materials making up ca. 70% of total cost of goods, we must pass these inflationary cost increases on to our customers to reasonably protect our already thin margins. Industry-wide, capital expenditure and innovation efforts are already at a dangerous minimum.

The repercussions of a widespread closure of unprofitable refractories plants or production lines could be severe. If, and when, the turning point for an economic recovery comes, world leaders will be bitterly disappointed if steelmakers are hamstrung by shrunken refractories supply capability. So, one would assume that the issues impacting the future of the refractories industry would be high on policymakers’ agendas. Yet still, the refractories industry – the essential ingredient for making our cars, houses, plastics, even paper – does not have the public attention it justifies.

In Europe, Ursula von der Leyen’s new EU Commission announced in September signaled a commitment to reinvigorate Europe’s industrial strategy, but this will be futile if the needs of the refractories industry aren’t taken into account.

For example, RHI Magnesita is calling for a review of the Critical Raw Materials Act to include high-purity magnesia and dolomite, two key refractories precursor minerals, to ensure that refractories production in Europe remains financially viable and innovation continues.

The refractory overcapacity

But as politicians change and policies get modified, I also encourage our industry to help itself:

We today have a self-inflicted overcapacity problem which must no longer go unaddressed. A number of major producers have been progressively building out new greenfield plants in a flat, no-growth industry with pricing challenges. We estimate that excess capacity is running at some 40% above demand and, shockingly, growing. For example, India alone is seeing an addition of almost 300 kt of new greenfield capacity in the next 2-3 years. Reasonable growth of customer demand in India has led to a frensy race for new capacities by many refractory players in India jointly producing very large overcapacity. How rational is this in the context of the macro challenges outside of our industry’s control? RHI Magnesita has been pursuing growth via an M&A strategy while focusing on bringing new innovations and greener production methods to the industry.

Decarbonization needs policy support

Value-add instead of old-style mass production must become a priority. Innovations including refractories recycling or refractory life extension through digital data usage must become more widespread to improve the sustainability of our product and help our customers improve theirs. The opportunity if we focus on innovation is still there.

The Governments and policy makers can help here as well. Within RHI Magnesita’s own sustainability agenda we have ambitions to take a lead on hydrogen adoption and carbon capture and utilization – neither of which will be possible without policy intervention to support new technologies, risk capital to allow first-mover industrial installations, as well as new infrastructure that will benefit a wider industrial decarbonization journey and help the industrial sector to grow again.

Refractories are an overlooked ‘critical’ global industry, a facilitator of the building blocks of modern society. Today, macro crises have led us to a highly challenging juncture. It is essential that we adapt quickly to help power a global economic recovery, and for this we need horizontal and vertical private sector collaboration and public sector recognition, support and engagement.

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