Duferco Group

Side by side on high end projects.


Since 2006 Cresco has been priviledged to work side by side with Duferco Engineering on several important projects at La Louviere, Clabecq, Verona and Frederiksvaerk.

Ezio Palmisani, CEO of Duferco Engineering, introduces us to one of the most important steel groups and flagship of the Italian industry.

Cresco is a group of engineers able to go beyond the pure structural design, ensuring compliance with functional requirements and budget targets.Ezio Palmisani

In recent years, Duferco group has heavily invested to complement the trading activities with the steel production. Lately, seems to be reversing the path with the sale of historical plants to the Russian group, Novolitpesk. Do you believe that this could be a harbinger of a further contraction of the steel market?
Steel is a global product and volumes follow the trend of growth of countries. It is not appropriate to say that it is a contraction of steel market, but we can talk about a ‘movement of volumes’ which, from advanced countries currently in crisis, concentrate in emerging areas: China, India and Brazil represent now a magnet for steel market, while Europe, animated by a liberal ideology, cannot certainly compete with the emerging iron and steel industries that, on the environmental, labour and protectionism points of view, acquire from the beginning a competitive advantage, difficult to recover with the only efficiency, also taking into account that raw materials and energy costs represent an increasing burden on the cost of the processing chain. Within this scenario, steel industry in Europe can maintain its role by focusing on high quality products and niche products that require substantial investment to adapt the plants to new technologies. The dissolution of the JV with Novolitpesk had as origin a different way of thinking about the business model: NLMK, because of high processing costs, intended to transfer from Belgium to Lipetsk (Russia) the production of liquid steel and semi-finished products (slabs, blooms, billets, ....), productions that represent the domestic "core business" of the Russian giant. Duferco, however, for several reasons, intended to keep these productions in Belgium, but accompanied by a series of investments aimed to improve the quality performance and to reduce production costs. Anyway, despite the sale of important productive assets to NLMK, Duferco Group is the first group in the world for steel trading.

Steel, as all raw materials, has a cyclical economic trend. In the past, do you remember periods of crisis like the current one?
In my opinion, the crisis of 2009-2010, which still prevails in many sectors, shows characteristics of uniqueness in comparison to the ones we’ve been through in the past. The distortions caused by a kind of capitalism that pointed to create wealth with lax practices of financial engineering, have created a situation that was inevitably doomed to be unstable and to collapse. In the western world many people lived for a long time above their means and speculation found plenty of spaces to exploit fragile situations. I’m convinced that only the economy which comes from industry, from research and from work can allow to power the engine of growth, through the renewed confidence of investors. The current crisis is just reflecting the loss of these values.

Duferco Engineering is responsible to manage and complete projects that comes from Group or third parties investments. So, by its nature it should tend, first, to make the expenditure of moments of low propensity for development. Do you notice this?
I would say ‘market development’ rather than low propensity for development. Duferco has managed and implemented in recent years many important investments of Duferco Group and therefore it had no interest to open itself to the market. But this didn’t prevent us to start a process of diversification in order to follow the strategies of the Group, providing EPC and EPCM services in the energy sector, especially that one produced by renewable sources. From large investments in the steel industry we passed to short-lived medium/little investments. Flexibility and adaptability are essential tools to handle this new course without neglecting the opportunities that accrue outside Duferco Group, for ensuring a continuity in the workload.

What features should an engineering company as yours must overcome this crisis?
The most important qualities are flexibility, with a strong focus on the quality of services; capability to open up to the market to seize the opportunities; desire of innovation and research; propensity to create structures for the provision of services for management and maintenance of plants (Global Service).

Which are the values or principles that inspire Duferco?
Our company recognizes the following values: We are part of a Services Company created to serve the customer, we work in team respecting everyone’s role…smiling; The main aim of our mission is to find the right solution for the reduction of costs and the maximization of benefits; All suppliers are Suppliers, we respect them and we respect their job, but we keep distance; Before buying something, we want to know the cost; We have our ideas but we’re ready to change them if someone has better ones; We’re responsible of our role and of our actions. In case of problems we’re willing to seek help; We’re honest both in big or small occasions; We’re able to give added value to the works assigned to us; We want to establish a good relationship with people that are indispensable for achieving the objective, enduring who’s intolerable and always finding a reason to go on.

Could you talk about the projects which Duferco Engineering has in progress and the direction for the near future?
At the moment Duferco manages projects classified into two ‘Business Areas’: The Steel Area, oriented to the revamping of existing plants, and the Energy Area, aimed at the realization of photovoltaic plants for Duferco Group and for third parties (through Duferco Egreen company) and mini-hydroelectric power plants. In the near future, they’re being studied combined plants for the production of energy from renewable sources and capable to operate in areas without infrastructures.

What can you say about the long term partnership with CRESCO?
We should always give confidence to deserving, capable, eager and willing to learn young people. The result of this collaboration with Cresco is certainly positive. I love to take part in projects, and I believe that my suggestions have helped to transform a promising but still immature reality in a group of engi-neers able to go beyond the pure structural design, ensuring compliance with functional requirements and budget targets.

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