Gränges is active on the global market for advanced aluminium materials, with a clear leading position in rolled products for brazed heat exchangers. The acquisition of Noranda downstream in 2016 resulted in considerable changes to Gränges’ customer structure, markets and geographical exposure. The proportion of sales to the automotive industry has decreased in favour of stationary heat exchangers (HVAC), transformers and food containers, and the Americas have become Gränges’ largest geographical market, with close to 59 per cent of sales volume (proforma, full-year 2016)
A complex market
The market for advanced aluminium materials is relatively hard to enter profitably. This is not primarily due to the capital-intensive nature of the industry, but rather because of the high level of competence and experience required to develop the new, advanced materials that customers demand. Competence and experience are also critical to operating flexible production processes efficiently, and to be able to guarantee a high degree of delivery reliability in terms of volume, time and quality. Overall, these exacting demands require well-tuned manufacturing capabilities and processes refined over extended periods of time. Over and above this, other requirements include an effective customer service and a global logistics capacity, as customers are generally global players looking for daily just-in-time delivery to avoid inventory.
Gränges has long-term relationships with its customers. This is a result of Gränges’ strong focus - to continuously develop new products, materials and processes in close co-operation with customers. These long-term customer relationships are also the results of Gränges’ strong brand on the international market for heat exchanger materials, as is Gränges’ capacity as a global supplier with excellent delivery reliability. Of Gränges’ customers, 85 per cent have worked with the company for more than ten years. The ten largest customers represented 53 per cent of the total sales volume in 2016, and the largest customer accounted for 10 per cent of total sales for the year.
Competition and market share
Gränges’ competitors vary in size and strategic focus. Factors that influence the degree of competition differs between region and end-user, but in general Gränges competes on product quality, the ability to meet customer requirements, product range, lead times, technical support, price and customer service. Competitors are primarily major global aluminium companies such as Aleris, Arconic, Huafon, Norsk Hydro, Novelis and UACJ. In Asia there are several local players that are direct competitors to Gränges on the Asian market. In Europe and North America there are growing signs of competition from Asian manufacturers. Today, Gränges has a leading global position in rolled aluminium materials. Within the industry for rolled products for brazed heat exchangers Gränges has a clear market leading position, estimated at around 20 per cent globally.