Business activities
Aurubis AG is an integrated copper group focusing on copper concentrate processing and metal recycling as well as copper product fabrication. Precious metals and specialty products complete our range of services. Aurubis is therefore represent- ed in significant parts of the value chain for copper.
The Group’s sites are primarily located in Western Europe, with larger production centers in Germany, Belgium and Bulgaria. Outside of Europe, Aurubis also has a production site in the US and a broad sales and service network.
About 6,500 employees work for Aurubis worldwide.
Business model
The strength of the Aurubis Group’s business model lies in the close, coordinated connection of copper production and copper processing.
The Group’s raw material supply is based on two pillars and is therefore well suited to utilizing market opportunities and absorbing supply risks. On the one hand, the Group purchase and uses copper concentrates drawn from ores. On the other hand, Aurubis is well positioned in metal recycling and processes copper and other recycling materials in addition to intermediate products.
Aurubis’ product portfolio includes standard and specialty products made of copper and copper alloys as well as other metals.
The main product is copper cathodes, which are traded on the international metal exchanges. Aurubis produces 1.1 million t of copper cathodes annually and is thus one of the largest pro- ducers in the world. Copper cathodes are first and foremost the starting product for fabricating copper products in the Group, but they can also be sold on the metal exchanges or to trade and industry. Aurubis processes copper into continuous cast wire rod, rolled products, strip, specialty wire and profiles. The Group produces a broad spectrum of materials.
Organizational structure: three operating Business Units with central management
Business Units
Primary Copper
» Processing copper concentrates
» Producing copper cathodes for sale on the metal exchanges
» Producing and marketing sulfuric acid, selenium, iron silicate and other specialty products
Recycling/Precious Metals
» Processing recycling raw materials
» Producing copper cathodes for sale on the metal exchanges
» Producing precious metals and by-products
Copper Products
» Further processing copper cathodes
» Marketing copper cathodes
» Producing wire rod, shapes, pre-rolled strip, rolled and specialty products
Corporate Functions
Group Executive Board Direct customers include companies in the copper semis
industry, the electrical and electronics sector, the chemical industry and suppliers in renewable energies, construction and the automotive business.
Other elements found in copper raw materials are processed into additional products, in particular precious metals, sulfuric acid and iron silicate.
The Aurubis Group is managed from the corporate and admin- istrative headquarters in Hamburg, where the main production facilities are also located.
Group structure
The Group’s organizational structure is oriented towards its underlying business model: three operating Business Units (BUs) form the framework. This Group structure also corre- sponds to the segment reporting pursuant to IFRS 8.
Business Unit Primary Copper mainly combines the produc- tion facilities for processing copper concentrates and producing copper cathodes at the Hamburg and Pirdop sites as well as copper production at the Olen site. It also includes the production and marketing of sulfuric acid, selenium and iron silicate.
Business Unit Recycling/Precious Metals comprises the recycling activities in the Group and is responsible for the production of precious metals. The BU includes the recycling center in Lünen and the secondary smelter and precious metal production facilities in Hamburg. Companies and investments in connected business areas complete the portfolio.
Business Unit Copper Products consists of the production and marketing of products from the copper product sectors wire rod, continuous cast shapes, rolled products and special- ty products. From an organizational perspective, BU Copper
Price formation along the value chain (schematic illustration) Procurement price for concentrates and recycling raw materials Treatment and refining charges
Copper price Cathode
pemium and shape surchage Sales price for copper product
Products is divided into Business Line (BL) Rod & Shapes, BL Flat Rolled Products, BL Bars & Profiles and BL Marketing Cathodes. The holding in Schwermetall GmbH & Co. KG, Stolberg, is also part of this BU.
The BU’s significant production sites in Europe are Hamburg, Stolberg and Emmerich (Germany), Olen (Belgium), Zutphen (Netherlands), Pori (Finland) and Avellino (Italy). Outside of Europe, Aurubis produces strip made of copper and copper alloys in Buffalo (USA). Service centers in the United Kingdom, Slovakia, Italy and the Netherlands and a global sales and dis- tribution network complete the BU’s performance profile. Cross-group sectors support the operating divisions with their service and administrative functions.
A list of investments pursuant to Section 313 (2) HGB as at September 30, 2014 is provided in the notes to the financial statements.
Significant parameters relevant to the business
The significant parameters relevant for Aurubis are the copper price, treatment and refining charges for raw materials, cathode premiums and shape surcharges for copper products as well as sales revenues for sulfuric acid.
The copper price is formed first and foremost on the London Metal Exchange (LME), which facilitates physical transactions, hedging and investment business. The price represents a benchmark beyond exchange trading and is recognized inter- nationally.
The copper price is the basis of price calculations in the raw material and product business. There are no significant direct risks from price fluctuations since the price is extensively and continuously hedged.
However, the copper price indirectly influences the raw material supply and demand. Furthermore, efficient metal production in our plants can lead to effects on earnings, which can cause changes accordingly depending on metal price fluctuations.
Treatment and refining charges (TC/RCs) are negotiated with suppliers when purchasing copper-bearing raw materials. The TC/RC trend depends on the supply and demand structure on the global markets. TC/RCs are essentially the compensa- tion for turning raw materials into the commodity exchange product, copper cathodes, as well as other metals.
The metal exchange and market quotation for copper serves as the price basis for our copper product sales. The Aurubis cathode premium and shape surcharges, which are charged for converting cathodes into copper products, are also part of the sales price. Economic trends and other developments have an impact as well.