“Aluminium has become the material of choice for automotive OEMs, which are transitioning from steel to aluminium” Peter Basten, VP, Strategy and Business Development at Constellium

Constellium is a global leader in manufacturing innovative value-added aluminium products for a broad scope of applications dedicated primarily to the aerospace, automotive and packaging markets. In an email interview with AlCircle, Peter Basten, Vice President Strategy and Business Planning at Constellium talked about their latest developments in the automotive sector and shared his outlook for aluminium in the automotive, aerospace and packaging sector.

Mr. Basten has been Vice President Strategy and Business Development since July 2015. He was previously the Managing Director of Soft Alloys Europe at Constellium’s Automotive Structures and Industry Business Unit. Prior to this position, he was Constellium’s Vice President Strategic Planning & Business Development.

Excerpts from the interview:

AlCircle: Constellium offers complete lightweighting solutions to the global automotive industry. What are the latest developments in the company in this sector?

Peter Basten: As a one stop-shop for our customers, we provide automotive manufacturers with solutions for both Body-in-White (BiW) and extrusion products, including Cash Management Systems and structural components.

In the US, our strengthened partnership with UACJ positions us as a true global player in the promising market of automobile rolled products. We have started the qualification of our first US BiW finishing line in Bowling Green, Kentucky, and we intend to build two additional finishing lines in locations to be announced. In Europe, the ramp up of our new finishing line in Neuf-Brisach is expected to significantly increase our BiW capacity as early as 2017.

Thanks to targeted investment, we are a leading global supplier of structural components. In the past year, we have expanded capacity in our Van Buren, Michigan facility, we are building a new manufacturing plant in Bartow County, Georgia. In Europe, we have made a €22.5 million investment in our plant in Decin, Czech Republic.

The R&T capabilities of our R&D Center, have designed Surfalex® HF, our high formable skin solution, as well as Kool X™, our new multi-clad solution for demanding heat exchanger applications and continue to contribute towards our portfolio expansion.

AlCircle: Lightweighting is not a choice but a necessity. Is switching to aluminium as effective and smooth in the automotive industry as it is claimed?

Peter Basten: Aluminium has become the material of choice for OEMs, which are transitioning from steel to aluminium. This is not a change that will happen overnight as the switch to aluminium demands an adaptation of the whole industrial production process. But the success story of the F-150 truck, the first big pick-up truck made of aluminium, is a clear demonstration that this transition is happening. We are very proud to be a privileged partner of Ford for automotive structures and to have accompanied them in this transition.

Aluminium also goes beyond lightweighting; aesthetics, design, strength, safety, energy absorption, corrosion resistance and infinite recyclability are other reasons for car makers to prefer aluminium over other materials.

AlCircle: Where does Constellium stand as an aluminium solution supplier to the automotive sector?

Peter Basten: We are the joint #1 worldwide in aluminium Crash Management Systems and a worldwide leader in automotive structures, thanks to our unmatched alloy portfolio and unrivalled innovation capacities.

We are already a major player in the auto body sheet business, and with our aggressive and ambitious BiW strategy and the targeted investments made to support this strategy (see 1.), we are on track and well-positioned to become a global leader in this field.

Finally, we have renowned innovation capabilities thanks to our Constellium Technology Center C-TEC and through our partnerships with high profile universities and labs worldwide.

AlCircle: North American Body-in-White market is on a strong growth trajectory. How does Constellium plan to leverage upon the buoyancy?

Peter Basten: Experts forecast that the aluminium BiW North American market will grow from 490kt in 2015 to 950/1.200 kt in 2020 and even higher in 2025. Even if we take a conservative approach, it means that this market will double over the next five years.

As such, we are rapidly growing our capacity to meet demand. First, we have completed the acquisition of Wise Metals, the widest hot mill in the United States. Second, our strengthened partnership with UACJ is expected to position us as a leading player. We are now qualifying our first BiW finishing line in Bowling Green, Kentucky, and intend to build two additional finishing lines.

AlCircle: Where do you think lies the expertise of Constellium in the automotive sector, as a technology provider or a product supplier?

Peter Basten: As a historical player in the aluminium downstream industry, we have longstanding partnerships with the automotive industry, unrivalled R&D capacities, and renowned industrial expertise.

We know our automotive customers for decades and jointly work with them to define and provide them with tailor-made solutions, starting from the design phase all the way to the production phase.

We also have unique innovation capacities, with C-TEC, our R&D center in Voreppe, France, our strengthened partnership with Brunel University (see below), our International Scientific Council and the opening of our new C-TEC center in Plymouth, MI.

AlCircle: Tell us in brief about the recently opened Technology Center at Brunel University for automotive alloy development.

Peter Basten: Our research and Technology partnership with Brunel University London has expanded with the “Constellium University Technology Center (UTC)’ which opened in April 2016 and will increase our capacities to research extrusion technologies and solutions. This industrial-scale, one-of-a-kind center of excellence will provide rapid prototyping capability that is expected to reduce development times by at least 50% for advanced aluminium alloys required for the continued light weighing of automotive structural components. We will then transfer those alloys and processes to our plants at high speed and with minimal risk, thereby closing the gap between fundamental R&D and series production. The UTC will also be a unique platform to attract new international talents and develop scientists and engineers for the future.

AlCircle: Tell us in brief about Constellium’s Crash management systems and other safety solutions.

Peter Basten: As the joint #1 worldwide in Crash Management Systems, with both engineering and manufacturing capabilities in Europe, China, and the United States, we can deliver innovative crash management systems to our automotive customers. Our aluminium-based CMS incorporate engineered solutions specific to our customers’ production needs. We also offer global engineering and testing capabilities, and have a reputation for quality and cost-effective manufacturing skills for mass production.

Constellium’s new-generation CMS combine the properties of the 6xxx aluminium alloy family – formability, corrosion resistance, energy absorption, recyclability – with high-strength mechanical performance. Our innovative technology enables the production of aluminium CMS that are 15 per cent lighter and 10 per cent stronger than the current aluminium CMS on the market.

AlCircle: As a global leader in value-added aluminium products and solutions provider, what is Constellium’s future outlook for aluminium demand?

Peter Basten: We do not give any forecast. But our business model focuses on products with high added-value and significant growth opportunities- the automotive and aerospace business, while relying on a highly resilient business - packaging. Analysts and experts have pointed out the opportunities offered by the 10-year backlog in the aerospace industry, and by the transition to aluminium by automotive OEMs. I have already highlighted the market expectations for the aluminium BiW North American market (see question 4.). In Europe as well, we expect to benefit from strong market growth. Today’s industry analysts believe that the aluminium BiW market in Europe could jump from approximately 400 kt in 2015 to around 700/800 kt in 2020.

AlCircle: Which other markets, you think, will drive the demand for automotive aluminium structures globally?

Peter Basten: We believe Europe and North America are the two main growth areas, as regulations and light-weighing initiatives are expected to increase significantly the aluminium share in a car (see responses 4 and 8 for analysts’ projections in these markets). We expect China to eventually also drive the demand for automotive aluminium structures, and we continue to monitor the BiW Chinese market, but at this stage, our focus remains on Europe and North America.

AlCircle: Looking at the bearish trend in aluminium sector, how do you manage to stay profitable and aggressive in the market?

Peter Basten: As a downstream company, we have limited exposure to the metal price as this is mainly on a pass-through basis. And a low LME price actually makes aluminium more competitive compared to other materials such as steel, cooper, glass, plastic, etc.

But we also have unique assets in our industry. First, we have deep experience and roots in the aluminium industry, with longstanding relationship with our customers. Second, we are seen as an undisputed leader in innovation, which enables us to always be a step ahead with new technologies and patents. Then, we have the financial resources needed to support our targeted investment plan in the automotive and aerospace sectors. We have also optimized our industrial processes and reinforced our operational excellence through the implementation of LEAN program. But most importantly, we are able to rely on the skills, energy and commitment from our 10,000 employees worldwide. They are the key driver for our success.

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