Copper challenges

Luvata specialises in the production of copper products and copper manufacturing processes within a variety of industries.

The company has a long-developed history within the copper-making industry, dating back to the 16th century, when it supplied cannon barrels during the 30 Years War. Copper is widely used in industry, as it has the following critical properties: it transfers heat, conducts electricity, transfers signals and is resistant to corrosion. Over the decades, Luvata’s predecessors have amalgamated many different units.

Most recently, the company was acquired by a private equity company called Nordic Capital. Previously, it was known as Outokumpu Copper Products Division, a part of the Outokumpu group. Luvata June 07 bThe company took the name of Luvata, from the Finnish verb ‘to promise’, and it prides itself on working closely with its customers to produce copper-based products and solutions.

CEO of Luvata since 2005, John-Peter Leesi takes up the story: “The company formed a new management team, and built a new headquarters in London. The focus was upon the direction Luvata was going to take. This direction was developed following a number of in-depth discussions with customers around the world in the electrical, industrial and automotive businesses, as well as in heating, ventilation, air-conditioning and refrigeration (HVACR) industries.

“The company fundamentally wanted customers to answer two main questions: The first was what they thought about Outokumpu copper products. Customers responded by describing a company that was reliable, had good technology, and high levels of staff competence. Luvata also asked customers what kind of company they would like to see in the future. Response to this question was universally that they would like to see more engagement within the customer’s business, and they wanted the company to think about how it could improve their operational efficiency, products and processes.”

The result of these discussions was the development of the idea of partnerships beyond metals, whereby Luvata undertook a new program of working directly with customers in providing solutions for their copper-based needs but also expanded it offerings including other metals. The company has four main operations: rolled products, air conditioning tubes, HVACR coils, and special products. Luvata also progresses upon three strategic streams: consolidation, diversification in metals, and forward integration of value-added products.

As part of the forward integration strategy comes the impending acquisition of the company ECO. John-Peter continues: “There are three factors regarding the acquisition: It is a strategic move by Luvata to strengthen its valueadded product offering and solutions for HVACR customers; ECO is also a world leading manufacturer of coils and coolers, and a very credible market player, making it complementary to Luvata – the former having a good position within Europe, the latter being present in the United States; finally, the companies have a strong basis to tackle the Eastern European and Asian markets together.”

This emphasis on tackling a global market has seen Luvata achieve a turnover of 2.8 billion euros in 2006, while employing around 6000 people. Outlining the company’s strengths, John-Peter comments: “Luvata has a global reach, dealing with its customers in every part of the world, and supporting them typically in Asia, Europe and the US. Customer service is very important to the Luvata June 07 ccompany, and fundamental to future operation is to focus on research, design, and product development work alongside direct customer input. The company wishes to move away from working in isolation to its customers.” Central to new products and services is the orientation focus upon customer input, rather than manufacturing processes.

The main customers Luvata deal with are located in the HVACR (Heating, Ventilation, Air conditioning and Refrigeration) and electrical industries, as well as in the energy sector. For example, the company provided solutions in the creation of the Thunderhorse oilrig for BP and Exxon Mobil. It produced copper coils for the heating, ventilation, and air conditioning in both the living quarters and the engine rooms. Luvata is also providing copper wire solutions to the solar thermal energy market, as well as supplying battery nails for the production of batteries.

As John-Peter states, many challenges face the company, as “it is a business with interests in many industries. Luvata remains primarily focused upon and very optimistic about its involvement with HVACR projects, the company enjoys working in this fantastic industry, as it deals with the comfort and quality of life for people in their homes and their working environments. It aims to increase its capabilities and services in the 60 billion euro industry, as this also focuses on people’s quality of life. Energy efficiency and environmental issues are central to the development of the HVACR market, and companies like Luvata have a vital role to play introducing energy saving solutions. The company also focuses on industries like the energy sector, and the development of alternative or renewable energy sources. Luvata’s metallurgical and metalworking process expertise contributes massively to this process.”

Campaigns like ‘Think About It’, which promotes Luvata and its customers’ role within the energy saving sector, involves the development of products like oxygen-free copper and sunwire in the solar thermal systems. John- Peter concludes: “Luvata stands out because its employees work and encourage customers to begin dialogues regarding important issues, regarding saving energy and the environment. I would like to see it improve its position and grow as a business, yet do it together with our customers, helping them to grow as well.”

Luvata

Industry: Manufacturing copper and copper alloy products