09 Feb The support beams of Luxembourg
Georges Rassel, CEO, Paul Wurth, knows that, despite the country’s small size, it’s steel industry can have an outsized effect on the global steel industry’s development.
What would you say Paul Wurth has brought to the Luxembourg steel industry, a historic economic sector in Luxembourg?
What Paul Wurth has brought to the Luxembourg steel industry is perhaps not as significant as what it has brought to the global steel industry. Luxembourg, being a small country with a limited reach in worldwide steelmaking, makes our impact here also slightly limited. As many as 45 years ago, our engineers were already revolutionizing the sector in terms of manufacturing processes with a new blast furnace charging system. From an operational point of view, production was made far more efficient, not to mention the substantial effect it had on the conservation of fossil fuels. Nowadays, approximately two-thirds of iron-making processes in the world currently employ this type of equipment in their plants. This was a groundbreaking development that not only put Paul Wurth, but also Luxembourg, on the map among the worldwide leaders in the industry.
How has the R&D and innovation at Paul Wurth had an impact and how has it evolved?
The way research, development and innovation has been managed has changed quite a bit over the years. Previously, there was much more top-down decision-making to execute certain R&D programs. In the last few years, there has been a shift towards ideation workshops and the inclusion of all our employees’ ideas. From there we explore ways of how to further invest in potential projects. This is not only in Paul Wurth, but rather a global trend. At Paul Wurth we conduct R&D in collaboration with other organizations. We have set up our incubator to exchange ideas with creative young people from all over the world.
What is the next challenge for the steel industry and how do you assess the growth potential of Indutech?
Both the steel industry and I would say the entire planet share a common challenge, which is finding solutions for climate change, such as reducing CO2 or other greenhouse gas emissions and, in our case, producing green steel. This is a colossal challenge if we consider the sheer magnitude of the means that will need to be made available; and which there are yet to be concrete solutions for, ranging anywhere from renewable power sources, to massive electrolyzers to produce hydrogen, to financing new green hydrogen-based plants to replacing the purely carbon-based factories. If the solution relied solely on technical endeavors, it would be one thing. However, considering that politics are involved, our hands are tied, and innovation can be limited.
Would you say that Paul Wurth’s commitment to green hydrogen is its contribution to creating a more sustainable metal industry?
Part of our strategy is definitely to get involved in green hydrogen production and its use in the various industries with an emphasis in the steel sector. Of course, we need to fully understand the technical aspects before we can venture into specific applications, which is why we have invested in the technology company Sunfire, which produces innovative electrolyzers. However, we have now gotten to the point where we are driving the applications of this technology as well. Fortunately, people are listening to us: we have proven that we have done our homework and are knowledgeable in the area.
Would you give us an idea of what it would mean if industry were to suddenly employ hydrogen?
If the steel industry really wanted to, it would be technically possible to replace coal with hydrogen, more so than in other industries, although the quantities necessary are truly massive. In a short period, the power levels that are currently required in a given country would easily double. In addition, the steel industry is only one of many activities to be electrified. Take into consideration, for example, the e-mobility industry. The amount of renewable electricity needed will grow very quickly and again, will require political decisions to enable these advancements.
Power is available. The wind is blowing, and the sun is shining more than enough to make it possible. Theoretically it is possible, however not all the countries in the world have the same advantages. In Quebec, for example, hydroelectricity is available. In Scandinavia hydro and wind power is accessible, but there are other countries, like Luxembourg, which is so small that there would never be enough renewable energy produced in our own country to cover demand.
What does the SMS Group bring to Paul Wurth, and would you say it has been a turning point?
In 2012, the SMS Group, which is a family-owned business, acquired a majority stake in Paul Wurth. As they are also involved in activities that are linked to the steel industry, we complement each other nicely. We handle the design, engineering, manufacturing,
and commissioning the upstream part of the steel industry, where iron ore is transformed into iron. SMS designs, commissions and builds all the plants that make up the downstream segment, where the iron is transformed into steel and then into the actual products to be sold.
I would say the actual turning point is happening now with the concept of green steelmaking. With this switch in technology, there can no longer be a clear separation between upstream and downstream activity. There needs to be a combined view where we have different types of tools, such as the furnaces in which we combine the knowhow of both entities in a new type of factory. This fusion is from both a mechanical processes point of view as well as in the digitalization of the industry to further improve the design, operations and the predictability of how to do maintenance. After many years of working in parallel, we are now merging our activities to become an advanced technology company for the global metals industry.
Do you believe crises, like the COVID-19, can boost excellence?
Crises can certainly drive excellence, although it is not the only thing that does so. Indeed, they can have its advantages and disadvantages. Similarly, Luxembourg’s being characteristically small has its pros and cons. When it comes to securing support, it can be helpful. It is quite easy to get to know many people quickly. During the pandemic, there have been those that have initiative and want to continue despite the problems. In this respect, the excellent emerge while others disappear without funding or ingenuity. Some startups were able to use the crisis to better their position in the market, creating new business models. It is truly a delight to witness this type of dynamic.
How does Paul Wurth participate in the ecosystem of startups, and how does the Paul Wurth InCub workspace help young entrepreneurs?
Our initial idea was to attract young startups where, as a partner, we could somehow have a positive interaction with them from a technical point of view, exchange benchmarks, or even challenge them to see how far we could help them grow their businesses. After a couple of years, we have made significant progress, above all on the digital side, because not as much equipment is needed to actually develop something. You need your brain, a computer, support and, most importantly, a customer, which is where we come in. We can offer our startups direct access to our customers for a specific product or about digital solutions.
A startup requiring expensive technical facilities, labs or prototype plants makes things more difficult. Most successes are related to digital solutions that are somehow linked to the industry where we can put them in relationships with customers and subcontract part of our development work to them, counting on their creativity and willingness to produce results.
How do you endorse those startups, or have you taken over any of those startups that started with you?
I would not say we have taken any over per se, but we have invested in them. One example is a company called DataThings, which is quite a good fit with our activities and our industry. We wanted to help them by bringing additional money into the company to allow them to grow, to get additional people on board and to be even more efficient by developing the solutions that our customers would need.
How do you assess the progress made so far in Luxembourg’s AI strategy and what will it mean to have the EuroHPC JU headquartered in Luxembourg and the MeLuXina supercomputer?
It is important that in Luxembourg there is a disposition to create an ecosystem, together with the universities and the research centers. Also, the possibility of having MeLuXina is a clear sign that proves that Luxembourg is really on the cutting-edge of innovation. For us to be able to use it for simulations which we have been struggling with means that things that before took a few weeks to do one round with our own material is now reduced to a few hours of calculation time. This will allow us to do many more simulations and get results quicker. This is crucial if you want to be at the fore of the newest developments.
Do you think there is a responsibility on behalf of the private sector who can see future jobs to help the higher education system to prepare the next generation of specialists?
I would be happy to help if we really did know. We believe we know what will be needed in the short term, but what we will need in 10 years, I cannot really say with any certainty. Of course, our new chair in the University of Luxembourg hopes to accomplish something like that, which is to develop the expertise that will be needed in the future for hydrogen applications.
In the past, operations were mainly based on mechanical engineering. Now we are going to switch the technology towards hydrogen-based technical solutions. We will need know-how which today we do not have, or which is currently scarce. To support this expertise building we are starting even before university, motivating young people to go into STEM studies instead of finance and other industries. Once they are there, we want to offer more in-depth studies when it comes to hydrogen and all the related issues, from production and transportation to storage and specific applications.
Could the space industry be the new ‘steel industry’ as an agent of growth for Paul Wurth?
You may say so but in quite a limited way. It will not replace the steel industry. There is still a great need for steel in the world, even in the actual global decarbonization process. Wind towers are made of steel. Green steel can be completely recycled in an endless loop, so steel will still have a significant place in the new green and carbon-free industry.
Space is obviously remarkably interesting. iSpace is another organization to have been chosen in the strict selection of startups which we are hosting in our incubator. We learned of its aspiration to go to space to mine, and we thought we could somehow combine our processes with its targets. Taking it a bit further, why not also try to help them once they are on the moon, or on an asteroid, to extract metals from the stones there. At the end of the day, it is the metal that is interesting. Perhaps sometime in the future we will be able to develop business around that, but it will take time. We need to be patient.
How far away are we from mining on the moon or other celestial bodies?
If we are speaking on a small scale of extracting grams, I would say we are not so far. Maybe in the next couple of years there will be some progress made, once iSpace has its rover on the moon. However, from there to reaching the massive quantities which will be needed will take some time, decades most likely.
What is attractive about Luxembourg for talent or companies?
Again, we have the size factor. This facilitates connections to the people in leadership positions, and this helps start the process. Geographically, we are positioned well from a strategic point of view. It is easy to find things that are typically needed for developing industries, especially when it comes to young startups that need support in the beginning.
What do you look for in a startup?
To invite a startup to our incubator we look for companies with which we can have a positive interaction. On the one hand, it could be that, technically, we can challenge them, we understand what they are doing, and we can help them develop their technical skills. On the other hand, they may have a project leaning more toward the commercial side but still in the industry in which we are present. We can help with our worldwide sourcing setups, project management, and project realization skills if that would benefit them in some way.
Mostly it is a technical link we are looking for. There are plenty of fintech startups, but these are not hosted in our incubator. We like to have an added value that we can provide in our area of expertise. If not, it just makes little sense, and we are completely up front with those startups, letting them know we cannot help them.
Would you say that your corporate historical knowhow is one of your competitive advantages?
To be successful you have to know the DNA of the company. An outsider cannot come in and try to change something or implement something that was never there. Having been part of the company for more than 30 years, I believe I know what the company is about and understand its possibilities and limitations. Based on this, I try to select the right projects to promote within the organization.