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.
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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
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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.