Alteo: Abrasive ambition

By IM Staff
Published: Wednesday, 27 May 2015

Gardanne, France-based Alteo is a leading supplier of speciality alumina products to the global refractories and ceramics industries, but its main focus is on abrasives, as it seeks to capitalise pockets of “tightness” in supply. In order to take advantage of slim opportunities in what is a fiercely competitive market, the company has had to reinvent itself as a business with a reputation for reliability and consistency, Diego Audemard, commercial director for Alteo ARC Fused Aluminas, told IM.

What is the breakdown of your business in terms of product focus and profitability?

We sell our products into three main applications. In order of annual production volumes, these are abrasives, refractories and ceramics.

Refractories is our second biggest segment by volume but ranks third in terms of profitability, whereas cermamics is the smallest by volume but largest in terms of profitability.

Our main focus is on abrasives and ceramics. Refractories are important to our speciality products line (zirconia alumina 25%, nitrides and bubble alumina) and allows us to run our plants close to full capacity on standard brown fused alumina (BFA) and white fused alumina (WFA) grades.

How is Alteo different from its competitors?

The big difference between us and most of our competitors is that we have control over our feedstock. All of our products are made in France – including 100% of our 80,000 tpa fused alumina (FA) output – but we have a global reach and access to different raw materials all over the world.

Competition varies by product type in different geographical markets, so we have to focus our efforts locally to ensure that we are able to compete.

Pg 31  

Sparky: Alumina specialist ALTEO is looking to claim
market share from their competitors by being innovative
and responsive to changes in customer needs.  
Source: ALTEO 

Where do you see opportunities for expansion?

We see opportunities to both expand our sales to existing and new customers. We are operating in a market where there is a global oversupply of FA, because of China, which is the main global player in white and brown FA.

But customers are looking for alternatives – many FA buyers only have one, or at most two, suppliers, so we see opportunities to offer supply diversity.

And although there is oversupply of FA in general, some qualities and grades are in tight supply. This might be because there is difficulty in sourcing a particular quality or consistency of product. For competitive reasons, I cannot say exactly which products this tightness affects.

Last year, we expanded production capacity across all our product lines.

Which are your fastest growing markets?

In 2013-2014, the automotive industry showed the fastest growth in consumption of abrasive products.

So far this year, it has been difficult to identify exactly where the rising demand is coming from.

For Alteo, as a business we are growing mainly through expanding our market share, rather than as a result of overall growth in the industry.

From a geographical perspective, we sell mainly into Europe and want to remain strong and active here, while also expanding our footprint in North America and Asia. In South America, too, we are putting efforts into growth.

How is Alteo managing to claim market share from its competitors?

We are focusing on quality, consistency and reliability in our products and services.

Reliability used to be one of our weaknesses as a business and we lost customers as a result. We have invested heavily in improving this over the last two years and Alteo is now a trusted supplier of all the products we manufacture.

We achieved this by working closely with our customers – both by inviting customers to our plants and by sending our people to customer sites to help understand each other’s needs.

Based on what we have learned, we have worked to ensure that the quality of our products remains consistent while also expanding our range in accordance with what our buyers want. 

In 2014, we launched seven new products and have another eight in the pipeline for 2015. Our number one sales application is bonded abrasives (grinding wheels), but we are looking to increase our sales in ceramics, blasting and coated abrasives applications.

What are you doing in R&D?

Last year we invested a few million euros in R&D and in hiring new people and buying new laboratory equipment.

We are also launching several partnerships with our customers. All of our innovation comes from working with our customers and developing products and solutions based on their needs. These tend to be higher in quality and more cost-efficient.

What is your outlook on the wider industry this year?

I would say that FA prices are going up, although very slowly, as Chinese material is becoming more expensive.

There is still inventory pressure on white and brown FA as well as other alumina products, so this will limit price and demand growth.

However, we do see a chance to increase our sales into the abrasives and even the refractories markets if we target our products to where the need is.