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Gonvarri Industrial is currently the European leader in Steel Service Centres and is growing in Latin America. Gestamp Automoción leads, for its part, the automotive stamping sector in Europe.
This leadership strategy is based on the development of products and services with greater added value
which help forge closer relationships with our main clients in the automotive industry and in industry as a whole.
Both Gestamp Automoción and Gonvarri Industrial centre their efforts on providing clients with tailor-made solutions that optimise the joint design of new parts and components as well as the type of steel required for each case.
In addition, Corporación Gestamp has a strong international commitment, partly due to our connections to the automotive sector, which compels our main suppliers to develop projects in line with new industrial developments, but also due to a global vision of our activities.
The figures demonstrate the Group's great efforts to expand internationally,
involving investments of over €186 million in 2005 (already reaching
€1.226 billion from 1998-2005) and the opening up of unexplored markets such as the USA, where Gestamp Automoción has acquired two plants. The Group has also opened markets in northern Europe with the acquisition of the Hard Tech Group in Sweden (which also has a production plant in Detroit, USA).
With regards to the world economy, oil prices increased slightly at the end of the year, with a
barrel of crude oil costing 59 dollars. The dollar lost some of its accumulated appreciation to
the Euro and Japanese Yen, returning to levels of around $1.20 per € and ¥116 per dollar.
In the United States the international GDP growth rate remained at 3.6%, confirming
the strength of the growth although with signs of moderation in consumption.
Japan confirmed the recovery of its economy and China made an impression again with a growth
of 9.9%.
In the Euro Zone, the gradual rate of improvement was interrupted in the fourth quarter
of 2005, despite the fact that Spain has experienced one of the highest growth rates of around 1%.
Nevertheless, the European Central Bank has alerted of the persistence of upward risks for price stability and has announced that it will remain vigilant in order to ensure that long-term inflation levels remain in accordance with price stability policies.
In spite of the economic growth in Spain, there are major uncertainties in relation to opening Europe to the East, with the subsequent loss of European structural funds and the already ongoing delocalisation of industry, which seeks high growth rates in other countries with low labour costs.
With regards to the world iron and steel sector, China has been the biggest producer again, with 350 million tonnes (a third of the world total), 25% more than the previous year. However, in spite of these figures, the official experts estimate a deceleration in production for this year.
Spain showed moderate growth, with a production of 17.6 million tonnes. Iron and steel companies in Spain maintained their exporting efforts, which has led to an increase in sales, both in tonnes and in value.
After the record figure exceeding three million cars manufactured in Spain in 2004, our factories lowered their production by 8.6% in the last financial year, which is very discouraging when we take into account that the experts forecast a new fall for this year of 0.2%.
For its part, the Gonvarri Group also experienced an exceptional year, with an increase in its turnover of 12% in 2004, and has experienced moderate growth this year of 5%, following the trend in the sector.
In 2005 our new plants in Poland and Galicia which started operating at the end of 2004, have been consolidated. With these, the Group now has 16 plants and 2,140 employees, 27% of which work abroad. We are aiming for this percentage to reach 50% in the next three years, due to the strong expansion that the Group is undergoing and the large internationalisation process being developed.
In fact, last year the foundations were laid for what will be the Group's two new centres. These centres, strategically located in two large car manufacturing countries, will start operating at the end of 2006 in Germany and Mexico.
As regards the commercial area, the priority sectors of the Group are the automotive sector which represents over 50% of our sales, as well as construction, storage, household appliances and road safety, which are the next most important markets for the Group.
In all of these markets, Gonvarri has consolidated its leadership as the most important Service Centre in Spain and in Europe, with a strong presence in Brazil as well, making the group a fundamental reference in the steel transformation market and an extremely valuable "ally" as it also contributes with logistics and management solutions, applying Just in Time (JiT) systems and optimising the entire value-added chain of the steel supply.
This leadership has been achieved by maintaining high profitability and solvency rates that have allowed for the large investments required to be managed.
In this sense, the aim and strategy of the Gonvarri Group is to continue progressing in its partnership relationship with its clients, which implies consolidating the activities in our markets of origin and developing them in new geographical areas.
It is also worth mentioning that the focus of the Group's development strategy is its commitment to Quality and the Environment. We have received some of the most prestigious international acknowledgements and we are aware that preserving these aspects is essential for the sustainable economic development of the company.
All this is only made possible thanks to our highly skilled workforce -a fundamental pillar and the driving force thrusting the Group to progress with enthusiasm and to overcome the difficulties that the market presents at any given moment.
FRANCISCO RIBERAS PAMPLIEGA
President of the Gestamp Corporation
JON RIBERAS MERA
Gonvarri Group Chief Executive
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