A partner for megaprojects

Five years after gaining its political independence, India wants to build up its own steel industry to  become economically independent as well. German companies are to deliver the plants for the first integrated steel mill. The German government is eager to support the project as best it can and finances large parts of it through loans provided as development aid. The contract goes to a consortium including Siemag, Mannesmann-Meer, Demag AG and Maschinenfabrik Sack, several of the companies that today make up SMS group. The SAIL plant in Rourkela becomes the nucleus of the Indian steel industry, which is now the second largest in the world, producing around 125 million metric tons per year.

For many employees of these companies, the project is probably among the most exciting chapters of their professional careers. In many cases, they spend over a year in a place that, at the time, is practically seen as the other side of the world. The Siemag staff magazine recounts the long journey from Hilchenbach to Rourkela by plane and train, the intense heat, tropical climate and language problems they encountered, but equally the pleasure of sampling the "wonderful and delicious" local cuisine. For leisure time, the German companies set up facilities including an outdoor cinema, a swimming pool and a football field.

The megaproject in Rourkela was certainly something extraordinary given its size and duration of more than ten years, but it was not a complete exception. The earliest international milestones for SMS include supplying the first rolling mill to China in 1904 and an order from Alcoa in the USA in 1928 for what was then the world's largest aluminum rolling mill. In the 1930s, there are major orders from France and the Soviet Union and in the 1960s and 70s, SMS carries out large turnkey projects in places including Brazil, Venezuela, and Nigeria.

One milestone on the way to becoming the global market leader in metallurgical plant construction is the completion of two major projects in Wuhan and Baoshan in the 1970s and 80s. At that time, the Chinese government wants to establish its own flat steel production as part of its modernization policy and to boost the domestic economy. Their negotiating partner at SMS is Heinrich Weiss, who just recently took the helm at the company. He recognizes the huge potential in the market, which until then had been practically inaccessible to Western companies, and he is prepared to accept the economic risks. His courage pays off: with these two contracts, SMS demonstrates both that it can handle such large-scale projects and that it is at the forefront of technology. These two projects lay the foundation for many other orders in the decades to come.

The major project at Baosteel involves supplying a hot strip mill and a cold rolling mill. It remains the company's largest order for almost three decades. Several hundred SMS employees and their families are relocated to China during the implementation phase, in some cases for several years. They install nearly 100 metric tons of components on site and successfully commission the plants. In turn, more than 1,600 Chinese employees come to Germany during the Baoshan project to supervise production or undergo training.

Today, for megaprojects on the scale of H2 Green Steel or thyssenkrupp Steel, we apply the same approach as for all of our customer orders: “Project First”. Once we win an order, we put together an international team for the project that is responsible for integrated time scheduling and resource planning as well as for the smooth execution of all project phases – from the start, right through to commissioning. At SMS, handling a project for a customer is like running a business for a limited period, where the project manager functions like a CEO.

To be the very best partner for our customers' investments, we established our Center of Excellence Implementation in 2022. Bundling our competencies in this way enables us to implement the most sophisticated projects, where we provide the engineering, procurement and construction, all from a single source. This EPC project expertise is a key advantage for us in the market.

To bring the way we collaborate internationally to the next level, we recently completed a digital transformation of our internal processes. The goal is to achieve a harmonized way of working throughout SMS, with uniform systems and processes in a common language. The harmonization of our data and process structures will make us faster, more efficient and more transparent, and will also make international collaboration easier.

Our “Project First” approach stood up against a number of unforeseeable challenges during one of our latest major supplies. In 2019, we received an order from US-based Steel Dynamics, Inc. (SDI) for a next-generation flat steel complex consisting of an electric steel mill, a casting and rolling line, pickling/tandem mill, off-line Skin Pass Mill and strip processing lines. The term “megaproject” was well earned given the sheer scale of this greenfield location – a site spanning 10,5 km², 22,500 tons of structural beams needed for buildings, and almost 400,000 m³ of concrete poured – resulting in an steel complex with the capacity to produce 2.7 million metric tons of flat steel per year. For our team, a total of 330 SMS employees, representing 21 different nationalities, were needed on-site over a two-year period, with many of them re-locating with their families in long-term accommodations.

Outside of the scale, however, the required equipment and management of their installation were in line with previous orders, and did not raise any immediate concerns or challenges as the construction kicked-off. This, however, changed completely only a few short months later, as the global COVID-19 pandemic became a central barrier across all aspects of the project – from supply chain lines, to on-site working restrictions, to the challenges of getting international workers in and out of the US during travel closures, and ongoing economic uncertainties. In spite of all of this, along with a hurricane or two during the course of the project, our team was able to maintain a project plan and ensure continuity in the progress of installation. SMS employees completed 150,000 working hours during the project, without any reported incidents, realizing our requirements in this state-of-the-art megaproject to completion.