SSAB’s research and development work is based on the market’s needs. Through a structured process we identify relevant customer segments in which lighter, stronger and more durable steel applications fulfill critical functions and generate added value.
SSAB’s development work is focused primarily on high strength steels. Focus is placed on process and product development, as well as customer applications. The work is governed by the Company’s overriding vision, which constitutes the basis for a research and development vision:“Our main products shall be the first choice for customers throughout the world, and will set the standard for performance in our selected market segments. Thus, for each main product SSAB shall identify two to three qualities which are important for the end user. In respect of these products, we will ensure long-term leadership by developing cutting-edge, guaranteed technical qualities.”
In order to maintain a leading market position, the development work must be more efficient than that of the competitors. SSAB has identified a number of key factors for successful research and development. One important factor is that research and development must be market driven.
In addition, SSAB places great importance on efficient portfolio and project control.
Market-driven R & D
SSAB has developed a clear process to ensure that product development is market driven. In an initial phase, a number of customer segments are identified in which rigorous demands are placed on steel. Sustainability aspects, combining environmental and economic aspects, weigh heavily in this analysis, in terms of fuel consumption and durability. Thereafter, those steel applications are identified within the segments in which needs for high strength steels are greatest, as well as those qualities, e.g. abrasion resistance, construction durability or weight, which are critical for the application.
When needs have been clearly identified, an analysis is undertaken regarding customers in the segment and also the market’s structure, demand and supply. If the results of this analysis are positive, an in-depth analysis is conducted regarding profitability potential.
The identified segments include, e.g., passenger cars, construction machinery, as well as agricultural and forestry machinery where abrasion-resistance and high strength constructions are important. Cranes, with rigorous demands for load tolerance (tensile strength), represent another segment.
At the same time, research is taking place on a microstructure level with the aim of enhancing the steel’s core qualities. This research work is matched regularly against the market-driven projects, so that an identified need which has profitability potential can rapidly be converted into a new product.
Efficient portfolio and project control
The value of the project portfolio is optimized through a strong focus on portfolio control. This control takes place based on two perspectives:
Correct choice of project. There must be a sound balance between projects which are driven by specific customer needs, extraneous changes – e.g. new legislation – and a market analysis as described above.
Correct implementation. The project must be implemented in the best possible manner by choosing the correct project model for the purpose, ensuring the right resources and by a regular focus on avoiding and dealing with bottlenecks in the process.
In order to maintain its leading position, SSAB’s research must have a long-term perspective. The ambition is that 10 percent of research and development resources shall be allocated to projects with a longer term perspective, approximately 5–10 years.
Development in proximity to the customers
The Group’s research facilities constitute the hub in the development work. In Oxelösund there is a center focusing on development in the production of quenched products as well as quenched plate product development. In Borlänge, there is a Center of Excellence with specialists within applications technology and a product development laboratory.
SSAB endeavors to conduct research as close to the customer as possible. During the year, a new research and development facility was opened in Montpelier, Iowa, which includes a laboratory with advanced equipment for testing, modeling and metallography.
In Kunshan, China, work also began during the year on the construction of a new research and development center, which will focus on processing and applications development of high strength steels. Asian customers will thus obtain better opportunities to develop production efficiency and product design in co-operation with SSAB. The new facility will be commissioned during the third quarter of 2011.
Local process development within the various production units is also carried out at all large production plants.
In addition, SSAB co-operates closely with selected research and development institutions. During the year, a five-year co-operation agreement was signed with the SwereaKimab research institute, which is owned jointly by the Swedish state and the business community.
In total efforts within research and development will increase significantly in the years to come.