Rail manufacturing

Voestalpine Schienen is an affiliated company of the Railway Systems Division of the listed Voestalpine AG, with sister companies such as VAE, the world leading turnout technology group, and TSTG Schienen Technik in Germany, the second European rail manufacturer belonging to voestalpine. To find out more, we spoke with CEO Hans Pfeiler about the company, its customer benefit approach and growing in a fiercely competitive market.

INFRA. How did Voestalpine Schienen GmbH become a leading European rail manufacturer?
HP. Our company is known as global rail technology leader and pioneer in the field of research and development. We are the largest rail manufacturer in Europe and for us rails are high tech / high performance products, not commodities. We do not manufacture anything else: we define top performance in rails.

In connection with this, in February 2006 we commissioned a brand new rail rolling mill with many innovations at our site in Leoben-Donawitz, Austria. Technically and economically the new plant, applying the latest generation of universal rolling process, is the most modern in the world. It constitutes a milestone in rail technology. Even narrower tolerances, further improved rail surface execution and alignment to just-in-time production – possible by the shortest section change times – are the most important advantages. Everything including the ramp-up of production has been implemented exactly according to plan in an extremely short time and full industrial performance levels are already achieved.

This large investment – amounting to more than €350 million – completes a value added chain for the production of rails including metallurgy, melting and casting that is considered unique and a benchmark in the industry.

However, even investing and operating the most modern production facilities is not sufficient to create a lasting enhanced customer benefit. Railway and urban track infrastructure are very complex systems and it needs holistic expertise and system competence to be successful. Our customers have awarded the top position to us, because we combine leading edge technology, innovation, flexibility and service orientation in a manner that is unprecedented in our industry segment.

INFRA. What is the competitive concept behind your customer benefit approach?
HP. The global rail market is characterised by fierce competition, which we believe will get even more intense in the future. On the one hand the product, rail, is very standardised. On the other hand, it is a product with a great deal of differentiation, with application, profile, length, quality, steel grades, logistics and system know-how all playing a part in shaping purchasing decisions.

It must be borne in mind that rails account for only 0.5-0.6 percent of the world steel production and thus constitute a comparatively small – although highly demanding – niche segment. The European situation is similar, though there are (in spite of industry consolidation during the past years) still larger over-capacities than in other parts of the world and the concentration process is probably not yet completed.

Considering this background it is clear that technology and customer-benefit orientation are the major driving forces of our company. Having an excellent team of metallurgical and technical experts and a solid R&D budget, we develop technically and economically optimised solutions in the system rail for each load scenario and each application, and implement them for greater customer benefit.

INFRA. Could you give a few examples?
HP. Let us take the example of our ultra-long rails. At 120 metres long, these are the longest unwelded rails in the world. Longer rails mean less welding. This keeps costs down and also minimises risks from defects. We actually created this product segment, including the necessary logistical problem solutions, in anticipation of sustained increased benefit for our customers.

Another example is the area of head-hardened premium rails. Especially in Europe, infrastructure managers have to deal increasingly with the problem of “rolling contact fatigue”. This simply means that standard rail grades show insufficient resistance against wear and tear when train traffic exceeds certain levels of frequency, speed or weight. To avoid accidents and their possible serious consequences, additional maintenance work (in particular rail grinding to remove the cracks) or early track renewal are possible remedial measures, but in both cases cost-intensive and time-consuming.

The better solution? Voestalpine Schienen offers the world’s most comprehensive range of head-hardened premium rail products (HSH). Our head-hardening takes place in a patented in-line process with no practical volume limitation and with the highest stability. A suitable rail grade is available for any application. Systematic track testing performed together with one of the leading European railways has confirmed the following calculated benefits: increase of rail service lifetime by 200% percent and more, saving of total life cycle cost by 35 percent and more, and reduction of maintenance downtime by 50 percent and more.

Thirdly, we offer a far greater range of different rail sections than any of our competitors. And quality support and advice – for example with regards to lifecycle cost and RAMS-criteria (reliability, availability, maintainability, safety) – are a vital part of our market proposition. We have a continuously adapted value chain of rail-related services and have developed our own software tools in order to calculate and evaluate life cycle cost effects for both railway and urban tracks together with our customers.

In a nutshell: ultra-long, ultra-precise, ultra-durable, ultra-flexible, ultra-economical. This is our truly unique customer benefit approach.

INFRA. How do you think that the European and the worldwide market will develop?
HP. In the European marketplace, customers have awarded Voestalpine a leading position on the basis of top performance, system competence, mutual trust and long-term partnership thinking. More than two thirds of our production is marketed in Europe. But I have to mention the overseas business, which is steadily growing in all continents where premium rail products are required, including countries like U.S.A., Brazil, China, India, South Africa and Australia.

Our forecast is for relative demand stability in Europe, but a further demand increase in the major overseas markets in relation to their economic growth.

INFRA. What are the specific railway infrastructure problems in Europe and can Voestalpine make a contribution towards a solution?
HP. It is safe to say that continuously rising energy cost and ecological constraints will be accompanying us to the future. However, technically speaking, there is no more energy-efficient and clean mode of transport than steel wheels running on steel rails.

One of the greatest problems encountered by railways in Europe is that track costs have not significantly decreased in the last 30 years. In the same period of time, competing modes of transportation have seen a strong reduction in lifecycle costs. This narrows the business case for rail transportation. I fully agree with the policy of the European Union that a step change of the efficiency of rail systems including significant innovation is essential.

Voestalpine is not only a leading company in the field of LCC, but also consortium partner and member of the steering committee of the LCC project INNOTRACK for rail tracks. The project is co-funded by the European Union under the 6th Framework Program and had its kick-off meeting in September 2006. It brings together all major stakeholders, such as the track-related industry, infrastructure managers, academia and relevant associations, in order to achieve the ambitious LCC reduction objectives.

Of course Voestalpine is active in various other areas of a European coverage, for instance we are represented in the European Railway Technology Platform ERRAC, and participate in the drafting of the Technical Specifications for Interoperability for Infrastructure under the European Rail Agency (ERA). We also chair the Infrastructure Committee of the European Railway Industry Association UNIFE.

It may be true that the many railway reforms initiated in the past years on the European, state and company levels will still take a certain time until they all become fully effective. There is however no doubt that the European Union White Paper of 2001 and its present update show the way. Rail transport will continue to form a very important transport mode in the 21st century, be it for conventional railways, high speed, heavy haul, light rail and urban rail transport.