Newsletter Aleris
Edition 1 - February 2017
Dear leader,
I am excited to welcome you to our first “Monthly Europe & Global Markets News”. These updates aim to provide you with an overview of last month’s achievements and activities related to our 2017 priorities, which we already highlighted in Vaals early January.
As we want to interact with you also on a more personal level, some of these newsletters will be replaced by face-to-face meetings, either at our sites in Koblenz or Duffel, or off-site. You will be invited to face-to-face meetings 1 month in advance.
Below is the January update.
SAFETY
The Koblenz/Voerde site finished the year 2016 with a IIR rate of 0.34 and was awarded with a CEO excellence award during the January townhall. Congratulations!
We had no recordable incidents in the month of January. We did have 2 near misses that were severe. In Duffel we had a molten metal spill at one of the casting stations and in Koblenz, an operator, while maneuvering, tipped over a forklift. Both incidents could have been much worse and it reminds us to continue to look around and watch for potential unsafe situations and address those. In addition, good and clear communication is critical to avoid potential unsafe events.
We all committed to do five safety interventions a week during the last four weeks. I hope you are noticing a positive change in the safety behavior at and around your workplace. Please continue this great focus and behavior going forward.
FINANCIALS
We closed the month of January right on our plan for EBITDA. We recovered well in the second half of January from the production issues we saw in the first half in our Koblenz cast house and at the Duffel CALP. Shipments and production landed slightly above plan for the month.
Margins came in higher than planned for all main markets. Some of these gains were offset by reduction of inventory, more scrap sales and a negative impact from the US dollar rate, which ended up lower than what we had in the plan.
Overall a good month. February and March look somewhat more challenging given the flat market conditions, however we still expect the markets to further recover in April and beyond.
WINNING STRATEGY
Our Automotive team received good news from Audi China. Aleris got nominated for almost 40% of the new Audi A6 volume to be launched in 2019, for about 6.000 tons/year.
Automotive Innovation Center Detroit is getting shape and the team just succeeded in pressing a part by a simultaneous engineering approach exceeding customer expectation (customer didn’t believe that the shape could be made with Aluminum).
Lewisport successfully produced first coils, which will be used for customer qualification.
Related to our Aerospace market; we are making good progress on our Wingskin project. The team is in contact with several vendors, both in Europe and in China. Next step is to select the right equipment and vendors for the expansion in Zhenjiang. At the same time we are working towards a full qualification of our products for Airbus.
Our Industrial organization has put Account Teams in place for our key customers, and concluded contracts with 4 out of 5 major Hex customers, the fifth one, Denso, being in final stage of negotiation.
OPERATIONAL EXCELLENCE
Koblenz
The cast house team Koblenz recently finished two Kaizens. The first one was done in January, around the preparation and cleaning of the SNIF boxes (where the liquid metal is treated). The second was around the preparation and cleaning of the filter box. Results were very encouraging and the team managed to close most of the actions that were defined during the Kaizens. These events are part of the cast house improvement project which includes the implementation of Aleris Process Control (APC).
In addition, the team received approval to invest in two online measurement devices to get a better understanding of the composition cleanliness of the molten metal as it enters the casting process. This information will further help us to improve our casting process and quality.
Duffel
Overshoot program at the CALP in Duffel started well and the first indications are that it will deliver the projected capacity increase. We are awaiting formal customer confirmation for material produced to complete this important project.
We also started the 24-hour stop initiative in Duffel. During this new AOS/safety initiative, operators actively look for incorrectly used instruments and tools that are being applied at our installations. These tools are being gathered, reviewed and subsequently either made part of the procedure or thrown away as they may cause unsafe behavior. A total of 80 stops is planned for 2017, which shows our relentless focus on improving safety in our plant.
Compass
The Compass Project team has achieved to configure the go live model of the Company Planner.
To proof the reliability of the model and the IT systems, the Steerco & process owners agreed to freeze this model early week of February 13th, so no changes will be implemented as of then.
The system should be able to operate 5 consecutive planning runs without any incident. Assuming the reliability test is successful, the Company Planner will go live on February 20th.
CULTURAL TRANSFORMATION
We started 2017 with our kickoff event in Vaals. In the meantime, 3 groups participated in the culture transformation workshops. The feedback so far has been very positive and most of the participants have told us that they gained better insights into their own behaviors and that of others, and have a much better view on how they can contribute towards the desired culture. As we do this monthly update going forward, we will share with you best practices of desired behavior and culture, as we see them being deployed in our company.
May I ask each of you, when you return from the workshop, to schedule some time with your leader and discuss your learnings and some of the ideas that you might have on how to implement them in your daily work.
In the past weeks I had the privilege to talk to many of you and received a lot of valuable input. For those of you who I was not able to meet or speak, please know that I’m available in person or by email to listen to your thoughts or respond to your questions. Obviously, you can also reach out to other members of the leadership team. We need your feedback, suggestions and opportunities that we will use to become a more successful organization.
This is a very exciting time to be working at Aleris, and we can all make a difference.
Thank you for your valued contribution in making this transformation a success.
Jack Govers
