ABB Ltd. (ABB) will work on the ThyssenKrupp Steel’s Duisburg-Bruckhausen steel plant at Germany. The company received three contracts from ThyssenKrupp Steel Europe to upgrade the 7-stand hot strip rolling mill no 1 of the steel plant. The conglomerate value of the contracts is $29 million.
As per the deal, ABB will be providing automation for drives, power systems and equipment, and related project services. The orders were booked in the first quarter of 2011.
ThyssenKrupp is working to modernize its hot strip mill facilities with upgraded automation and drive systems to produce a new range of steel products. ThyssenKrupp produces about 15 million metric tons of steel annually from its four hot strip mills. The modernization of the plants will help it to produce light weight steel for the automotive industry, material for recyclable tin cans, as well as steel for oil and gas pipelines.
Further, the plants will also produce electrical steel for use in wind turbines, hybrid engines and other applications. For these grades of steel, consistent properties and precise dimensions throughout the entire hot strip are critical.
The orders are part of a framework agreement between ABB and ThyssenKrupp Steel Europe. Numerous projects have been delivered by ABB under this agreement, one of which included renewal of hot strip rolling mill no 2 at the same location.
ABB Ltd.’s power and automation technologies offer a solution for sustainable development, thus helping to shield the world's resources. The company has a number of technologies for the solar power industry with a growing installed base. ABB Ltd. has witnessed improving signs in late-cycle power, with some recent large contracts.
However, ABB's results are likely to be adversely affected by macroeconomic weakness as more than 80% of the company's orders are derived from outside the US. A major competitor of ABB Ltd. is Siemens AG (SI).
Based in Zurich, Switzerland, ABB is a power and automation technology company. The company operates in approximately 100 countries, structuring its global organization into five regions: Europe, Americas, Asia, the Middle East and Africa.
We maintain a Zacks #2 Rank (short-term Buy recommendation) on ABB Ltd.
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