Two of the world’s largest aluminum solutions providers, Orkla ASA and Norsk Hydro ASA, officially merged their respective profiles, building systems and tubing operations in a 50/50-owned joint venture called Sapa AS.
MetalMiner caught up with Patrick Lawlor, president of Sapa Extrusions Americas, about the new company.
MetalMiner: What does the new combined footprint of Sapa AS look like?
Patrick Lawlor: The new Sapa AS is in over 40 countries worldwide with revenue of over US $8 billion and 23,000 employees. From an Americas perspective, we have added to our already strong footprint in North America, as well as creating a footprint in South America with plants in both Brazil and Argentina. We now have 25 extrusion plants within the Americas, including three plants in Canada. With 68 extrusion presses of all different shapes and sizes (3” – 21”), we can serve a broad range of market segments and industries. In addition, we have five anodizing lines, nine cast houses, 10 paint lines and broad fabrication capability.
MM: Whom are you selling to?
PL: We sell to a wide range of different customers from large global customers and large national customers in the distribution and truck trailer markets to local regional customers.
Our extensive footprint and breadth of capabilities fit the needs of our national customers. However, we also organize ourselves on a regional basis to suit the needs of our local regional customers and in addition service thousands of customers through our distribution partners.
MM: What advantages will your customers receive from a combined entity? Should your customers be excited about this merger, and if so, why?
PL: There isn’t much product or customer overlap between Sapa and Hydro in North America – the markets we served and go-to-market approach were different. I would say there is only a small percentage of overlap between the businesses. Actually, when Sapa acquired Indalex there was more of a customer overlap, but this did not turn out to be an issue. We don’t anticipate this merger as being an issue in terms of overlap, and the offering we will give the market and our customers will be further improved by the enhanced footprint and capabilities of the new Sapa.
MM: How will this new merged entity help Sapa from a procurement standpoint? Will there be any purchasing efficiencies? How/why?
PL: Where it makes sense to do so, Sapa, at a global level, will pool procurement spend in relevant areas and work with a limited number of key strategic vendors. Similarly, Sapa Americas will pool spend together for key spend areas such as extrusion dies and tooling and MRO spend and again select a limited number of key strategic vendors and partners. Where it makes sense for us on a global level to pool, we will be looking to do that. We will continue to implement our LESS (Leading Edge Strategic Sourcing) initiative that Sapa has been working on for the past three years.
This interview will continue in a follow-up post, delving into whether Sapa will be shuttering aluminum capacity.