Worthington Steel Joint Venture, TWB Company, Signs Licensing Agreement with ArcelorMittal Tailored Blanks for Patented Ablation Technology

Rhea-AI Summary

Worthington Steel, Inc. (NYSE: WS) announces a licensing agreement with ArcelorMittal Tailored Blanks for ablation technology, enhancing hot formed tailored blanks production. The innovative technology allows for welding advanced high-strength steel, improving strength, crash performance, and reducing weight for automotive applications.

Positive

• Licensing agreement signed with ArcelorMittal Tailored Blanks for ablation technology.
• Enhancement of hot formed tailored blanks production capabilities in North America.
• Installation of fully automated ablation line at Monroe, Michigan facility.
• Ablation process removes aluminum silicon coating on weld edge of tailored blank.
• Hot forming process enables stamping of advanced high-strength steel for safety critical applications.
• TWB Company plans to invest in supporting customers embracing the technology.

Negative

• None.

Insights

Market Research Analyst

The licensing agreement between TWB Company, LLC and ArcelorMittal Tailored Blanks to utilize patented ablation technology signifies a strategic move in the steel industry, particularly within the automotive sector. This move is poised to enhance Worthington Steel's competitive edge by expanding its product offerings to include hot formed tailored blanks—a segment that is experiencing rapid growth due to the automotive industry's increasing demand for advanced high-strength steel (AHSS).

The introduction of ablation technology, which facilitates the welding of AHSS, is expected to yield benefits such as improved crash performance and weight reduction in vehicles, which are critical factors for automotive manufacturers aiming to meet stringent safety and fuel efficiency standards. The adoption of this technology by TWB could lead to increased market share and potentially higher revenues for Worthington Steel, given the technology's relevance in producing components for safety and weight-critical applications.

Financial Analyst

From a financial perspective, the investment in a fully automated ablation line represents a significant capital expenditure for Worthington Steel. However, it also indicates a forward-looking approach to capitalizing on emerging market trends. The 12-15 month OEM qualification period suggests a medium-term horizon before revenue generation from this technology begins. Investors should monitor the progress of this qualification phase, as it will be a critical determinant of the timeline for financial returns on the investment.

Furthermore, the exclusive nature of the licensing agreement could provide TWB with a competitive moat in North America, potentially leading to pricing power and improved profit margins. The impact on Worthington Steel's stock will depend on the successful integration of the technology and the market's reception of the enhanced product offerings. The company's ability to leverage this technology to secure contracts with automotive OEMs will be a key factor to watch.

Automotive Industry Expert

The integration of ablation technology in the production of hot formed tailored blanks addresses the automotive industry's push towards lightweighting and safety enhancements. Ablation technology's ability to remove aluminum silicon coating on weld edges is a nuanced but significant advancement, allowing for the welding of press hardened materials. This process is integral to manufacturing components that contribute to vehicle safety and efficiency.

Given the automotive industry's trajectory towards electrification and stricter emissions regulations, TWB's expansion in AHSS capabilities may lead to greater collaboration with automotive manufacturers. As these manufacturers increasingly seek out suppliers who can provide innovative solutions for lightweight and safe vehicle structures, TWB's early adoption of this technology could position it as a preferred supplier and drive long-term growth for Worthington Steel.

COLUMBUS, Ohio--(BUSINESS WIRE)-- Worthington Steel, Inc. (NYSE: WS) announced today that its tailor welded blanking joint venture, TWB Company, LLC (TWB), has signed a licensing agreement with ArcelorMittal Tailored Blanks for use of its patented ablation technology in the production of hot formed tailored blanks. This technology expands TWB’s hot formed tailored blanking capabilities in North America. Along with this agreement, TWB plans to install a fully automated ablation line at its Monroe, Michigan, facility.

“We’re excited to be one of two companies in North America to offer ablation technology and hot formed tailored blanks to our customers,” said Worthington Steel president and CEO Geoff Gilmore. “As one of the fastest growing segments in the tailored blank market, this innovative technology allows for welding of advanced high-strength steel, enhancing strength, crash performance and reducing weight for automotive applications.”

Specifically, the ablation process allows for the removal of aluminum silicon coating on the weld edge of a tailored blank, which is required before the press hardened material can be welded. The hot forming process allows this advanced high-strength steel to be stamped into a variety of safety and weight-critical applications.

“As more of our customers embrace this technology and the market continues to grow, we look forward to investing and supporting our customers’ efforts in this area,” said TWB Company president Ivan Meltzer.

TWB plans to install the new fully automated ablation line in its flagship facility in Monroe, Michigan. The 300,000 square foot facility currently produces traditional tailored blanks, tailored aluminum blanks and tailor welded coils. Following the ablation line installation, the company expects to spend 12-15 months undergoing OEM qualifications before beginning full production.

About TWB Company

TWB is North America’s market leader for tailor welded products with 11 locations in Kentucky, Michigan, Ohio, Tennessee, Ontario and Mexico. Formed in 1992, TWB Company is a joint venture between Worthington Steel and BAOSteel. Worthington Steel holds majority ownership and serves as managing partner. More information about TWB can be found at www.TWBCompany.com.

About Worthington Steel

Worthington Steel (NYSE:WS) is a metals processor that partners with customers to deliver highly technical and customized solutions. Worthington Steel’s expertise in carbon flat-roll steel processing, electrical steel laminations and tailor welded solutions are driving steel toward a more sustainable future.

As one of the most trusted metals processors in North America, Worthington Steel and its 4,600 employees harness the power of steel to advance our customers’ visions through value-added processing capabilities including galvanizing, pickling, configured blanking, specialty cold reduction, lightweighting and electrical lamination. Headquartered in Columbus, Ohio, Worthington operates 32 facilities in seven states and six countries. Following a people-first Philosophy, commitment to sustainability and proven business system, Worthington Steel’s purpose is to generate positive returns by providing trusted and innovative solutions for customers, creating opportunities for employees, and strengthening its communities.

Safe Harbor Statement

Worthington Steel wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by Worthington Steel which are not historical information constitute "forward looking statements" within the meaning of the Act. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. Factors that could cause actual results to differ materially include risks, uncertainties and impacts described from time to time in Worthington Steel’s filings with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240313232277/en/

Melissa Dykstra

Vice President

Corporate Communications and Investor Relations

Phone: 614-840-4144

Melissa.Dykstra@worthingtonsteel.com

Source: Worthington Steel, Inc.

FAQ

What is the significance of the licensing agreement between Worthington Steel, Inc. (WS) and ArcelorMittal Tailored Blanks?

The licensing agreement aims to enhance hot formed tailored blanks production capabilities by utilizing ablation technology for welding advanced high-strength steel, improving strength, crash performance, and reducing weight for automotive applications.

Where will TWB Company install the fully automated ablation line?

TWB Company plans to install the new fully automated ablation line at its flagship facility in Monroe, Michigan.

What does the ablation process involve in the production of tailored blanks?

The ablation process involves the removal of aluminum silicon coating on the weld edge of a tailored blank, which is necessary before the press hardened material can be welded.

What are the expected outcomes of installing the ablation line at TWB Company's facility?

Following the installation of the ablation line, TWB Company expects to undergo OEM qualifications for 12-15 months before commencing full production.

How does the hot forming process benefit the production of advanced high-strength steel?

The hot forming process enables the stamping of advanced high-strength steel into various safety and weight-critical applications.

What are the future plans of TWB Company regarding the technology investment?

TWB Company plans to invest in and support customers embracing the technology as the market grows.