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Corus is the second biggest steel producer in Europe (1), employing nearly 40,000 people worldwide(2) and making over 19.5 million tonnes of steel in 2009 (2). Formed in 1999, by the merging of British Steel and Koninklijke Hoogovens Corus was taken over by Tata steel in April 2007 (1) which means that Tata is now the 8th largest producer of steel in the world when Corus is included (1).
This report aims to study Corus and key elements of the business. Steelmaking is a very competitive market with new applications and products being announced all over the world quite regularly.
Corus steel is very easy to trace and is easily identifiable, as every single bloom, slab and billet produced has a unique identification number printed on it somewhere, which can easily trace the steel back to which plant it was made at, and even which processes it undertook. Corus steel has been used in many famous structures, such as The Millennium Stadium Cardiff, Petronas Towers Kuala Lumpur, and Tsing Ma Suspension Bridge, Hong Kong (2).
Corus is split into three divisions, and these three are: Strip products division, Long products division, and Distribution and building systems division. Each of these divisions is further split into even more specific categories.
Making steel is an amalgamation of many long and complex processes. To make a final steel product, the steel must be machined in a number of different ways to bring it to standard.
Steel is made using three raw materials: Iron ore, Coal and Limestone. Iron ore is first smelted into iron in a blast furnace. Corus in Scunthorpe has four blast furnaces, which gives it the capacity to make huge volumes of iron.
Hot air is blasted through the furnace at around about 900oc to 1200oc (4). These high temperatures are used to make sure nothing solidifies while still in the blast furnace. The iron produced from the blast furnaces is often very high carbon content (roughly 5%) (4) and is known as “pig iron” (4).
After this stage, the pig iron is transported in large rail bound vessels called torpedoes to the “basic oxygen furnace”. The basic oxygen furnace is where the pig iron is converted to low carbon steel (4). This method of low carbon steel making is widely used because of the speed at which steel can be produced (4). At this stage, scrap metal is also added into the furnace to drive down costs. Pure oxygen is blasted into the top of the furnace, and this reacts with the carbon in the pig iron to produce an exothermic reaction (6). This in turn, reduces the carbon content greatly, while also reducing amounts of impurities such as phosphorous, sulphur and nitrogen (6).
After this, the steel is put into an RH degasser (Ruhrstrahl-Heraeus). This is to further remove any impurities inside the steel (6). In this process the molten steel is pumped into an evacuated chamber using a vacuum pump while an inert gas is pumped in to give a boiling effect (6). This in turn, removes the impurities from the molten steel.
After this, steel made at Scunthorpe undergoes continuous casting. The steel is cast into one of three shapes: billets, blooms or slabs. These are defined by dimensional characteristics. A slab usually has a rectangular cross section, being very wide and not very thick (6). A bloom has a square cross section, as does a billet but a billet is much smaller than a bloom in width and height (6). Scunthorpe has two bloom casters, one billet caster and a slab caster (2). Continuous casting is advantageous to ingot casting because of many reasons, such as cheaper production costs and improved yield (7). Continuous casting as the name suggests, is where liquid steel is continuously poured from a ladle into a mould with a vertical cooling chamber (6). This then passes down through a curved roller system and onto straightening rolls (6). The steel is then cut into desired lengths on exit (6).
These are then rolled into desired products that are sold by Corus. Corus uses both hot and cold rolling to make final products. Each has its own advantages and disadvantages. Cold rolling provides a good surface finish, and good dimensional tolerance i.e. it can be rolled into very small sections (8). The problems with it are that stronger mill stands are needed because of how much stronger cold steel is rather than hot, and more passes through the rolls are needed as if it is passed through too fast it may crack (8). Hot rolling on the other hand, is advantageous because the metal is easier to deform so a bigger reduction can be done each pass (8). Also, complex shapes can be rolled because of the ease of deformation (8). The disadvantages of hot rolling include a poor surface finish because of oxidation, and a poor dimensional tolerance (8).
After these processes are completed, surface finishing and other minor processes may take place before the steel is sold to consumers.
Technical research and development
Corus partakes in a lot of research and development, in three key research centres. There is one in Ijmuiden in the Netherlands with roughly 500 staff (2), a 13,000m2 complex in Middlesbrough (2), and a large centre in Rotherham with about 400 staff (2).
The research and development department of Corus have come with numerous innovations in the past decade and are constantly striving to find new/better steels and new/better applications for them. Innovations include things like:
- The minelifta - A simple steel box that bolts onto the front of a bulldozer, giving it the ability to clear minefields with a reduced risk of injury because the box contains the explosions of the mines. (2)
- Surefast - A quick method of building structures that offer protection against terrorist and military attacks, as well as industrial hazards. This uses Bi-Steel and is fast and low cost to erect (2).
- Neotec - A lead free steel with a metallic finish, which has been researched and designed to help automobile manufacturers make more environmentally free fuel tanks (2).
- Corefast - A new way to build stairway cores for high rise buildings, a 6 storey lift core can be erected in 5 working days (2). This makes it extremely practical for time sensitive construction.
Key drivers for the business and possible risks
There are a few key drivers for Corus which help it to maintain its position as the 2nd largest steel producer in Europe.
The first key driver is price competitiveness. Without low prices for steel Corus would not have such a large number of contracts as other steel producers could be favoured for lower pricing. Corus does everything it can to keep all of its products as low cost as possible. This in turn, means that consumers are more likely to buy from Corus than other more expensive steel companies whom are selling a similar product.
Some companies also have a preference to Corus because of the speed at which Corus can produce steel on demand (2). With four blast furnaces in Scunthorpe, Corus can produce large amounts of steel very quickly, which is very useful when working in markets such as construction and automotive industries where demand fluctuates constantly.
Another key driver for Corus is the research and development it partakes in. As shown above, Corus are bringing out new innovative products all the time, which will grab market interest. This keeps Corus on the map in the field of new products and so companies often look to Corus for steel solutions.
The main risk for this business is if its target markets collapse, or there is a decrease in demand for steel. The recession in the UK in 2009 saw Corus cutting back as many as 3500 jobs (9). This is because there was a large downfall in demand for steel (9). Corus had no choice but to cut jobs because there was no other sustainable way of keeping them.
Current strategy to maintain/improve business
Corus was taken over by Tata Steel in April 2007 (2), and this gave Corus access to new markets in the East, amongst other things. With Tata Steel and Corus combined, the company has a large market area, spanning over 25 countries (2). Corus gained access to lower cost steel production when taken over by Tata Steel, which will help significantly with price competitiveness (2) against rival companies. Corus also gained access to Tata technologies, which could prove useful to Corus when trying to expand its target market.
As is with most products, the price competitiveness is paramount when trying to make and sell steel. When Tata Steel bought Corus, Corus was then able to lower prices of some of its steel products in the East because of access to new facilities (2).
Human factors in the business
Corus offer numerous placements and courses for employees and potential employees. Corus sees its employees as an important asset to the company, so they have many benefits and perks to working for Corus. Corus also run a large array of placements for graduates and undergraduates who are still at university.
For graduates, Corus offers schemes where the graduates will learn hands on skills in an industrial environment while earning a competitive wage. They offer training and help towards obtaining chartered status for accredited degrees, in a wide area of subjects including materials engineering, mechanical engineering, physics and even environmental science (10). They also provide subsidised private healthcare, and other benefits for being a graduate working with Corus (10).
For undergraduates, placements are available, which are for any length of time of 3 months up to a year (10). Undergraduates will be involved in significant projects and important day to day duties during their placement (10). They will also take on a small amount of responsibility within the business, as this helps to develop skills such as time management, team work and communication (10). After finishing a placement at Corus, undergraduates can apply for sponsorship through the rest of their degree, which is always helpful (10). Another good thing about placements is that undergraduates have a chance to show off their skills, and this may make them more eligible for a graduate placement once they have finished their degree (10).
As a young materials engineer, I feel that I could help Corus in a number of ways. I feel that I could use my skills in communication, leadership, team work and metallurgy to help Corus achieve its ambitions in becoming a world class company. After seeing Corus Scunthorpe, I have seen that there are many openings for well rounded graduates to take on roles of importance. Research and development is a very important department to consider when looking for graduate careers. Steel making is a strong industry to go into, as so many other industries rely on it as a source for materials.