North America

Bekaert_combined sales by sector NAM
Combined sales: € 512 million
Capital expenditures (PP&E): € 21 million
Total assets: € 300 million
Employees: 1 344

Economic environment in 2016

GDP growth of the US slowed in 2016, primarily due to lower investments stemming from low oil prices and to the declining competitiveness of US exports as a result of the strengthened US dollar.

Despite facing challenges at the domestic level along with a rapidly transforming global landscape, the US economy is still the largest in the world and an important player in industries such as automobiles, aerospace, machinery, telecommunications and chemicals.

Automotive markets performed well throughout the year and are projected to remain strong on the wave of growing demand for products ‘made in America’ – a development which is driving investments in domestic production capacity, among which in the automotive and energy-related sectors.

Our activity performance

Bekaert’s activities in North America recorded strong organic volume growth driven by the volume increase from the plant reconstruction in Rome, Georgia (US). 

Underlying EBIT was almost doubled compared with last year as a result of better capacity utilization driven by higher volumes and the effects from actions put in place to raise our competitiveness in target markets. Profit margins have not yet reached the desired levels but the effects of the implemented measures are clearly visible. Cash generation (underlying EBITDA) was 60% better than in the previous year and ROCE rose to almost 12%.

Capital expenditure (PP&E) amounted to € 21 million and related mainly to investments in tire cord activities.

Building the future for Bekaert in North America

Over the past decade, the market, the customers, legislation and the competitors have changed significantly in the North American region. These changes made our business model less competitive than it had been in the past. Profitability declined to unacceptable levels and the Bekaert North American team started a program in 2016 to reverse this situation. Their ambition is to build the future for Bekaert in North America. Their approach is a synopsis of all other global ‘must win battles’ implemented in Bekaert. The team has a focused and ambitious growth agenda and is building a world-class organization underpinned by manufacturing excellence, customer excellence, partnering excellence, and a strong passion to win. The first successes of this approach are visible in the results of 2016, which gave a big boost to the team in continuing their challenging journey. 

Investing for the future

The Bekaert plant in Rogers (Arkansas) is implementing a major expansion plan to meet the projected growing demand from the tire manufacturers based in the US, driven by their expansion programs and preference to source domestically produced tire cord. In order to accommodate for the projected growth, Bekaert has decided to add an additional 50% tire cord production capacity to the Rogers plant. The expansion will be gradually implemented and will add over 100 new jobs.

In September 2016 Bekaert Orrville (Ohio) held a ground breaking ceremony for their expansion investment which aims for improved safety, reduction of waste, enhanced service and quality, and energy efficiencies.
BMS, the Bekaert Manufacturing System, has been rolled out in Van Buren (Arkansas), Orrville (Ohio) and Rome (Georgia) and will be implemented in the other North American plants in the near future.

BCE, the Bekaert Customer Excellence program, is being implemented in regional as well as global business cells. Also the implementations of the newly launched Supply Chain Excellence program and of BeCare, the Safety Excellence program, include pilot implementations in the US.