How Are European Heat Treater Coping with Higher Energy Costs?

High energy costs are a challenge to all heat treaters around the world, and particularly challenging to heat treaters in Europe. So what is the solution? We look to captive/commercial heat treat Ramada in Ovar, Portugal for a solution, a solution they outline in this note below. To cut a long story short the company is absorbing 80% of the cost increases themselves and passing on only 20%. “The Monty Heat Treat News” chose to look at Ramada as we are very familiar with the firm having visited just a few months ago. In addition Ramada is a reasonably large facility with a mix of atmosphere and vacuum furnaces which makes them fairly representative of heat treaters in Europe. Further down we have a summary of the company as we saw it just a few months ago.

“We are aware that the whole industry is suffering from this energy crisis, in particular industries in which the use of electricity, gases and fuels, represent a significant percentage of the cost of products or services provided, as is the case with the Thermal Treatment Industry. To cope with these increases, an “extra energy” fee was introduced on 26 April 2022 (for orders placed after that date) which is directly proportional to the price of the daily OMIE energy market  (calculated with the current costs of gases, fuels and other consumables). The calculation is based on average consumption of electricity, gases and current fuels, by type of heat treatment.

Ramada Aços, at least in this initial period, will continue to bear the highest percentage of extra costs (80%) passing on to our customers at this time only 20% of all extra costs. However, given the current unpredictability of the costs of electricity, gases and fuels, we might have to review the percentage of cost distribution of the applied rate in the future. The evaluation of this “extra energy” fee will be carried out on the first business day of each month. The updated information will be available for consultation on our website

In order to facilitate the identification of the “extra energy” value, it will appear on the invoice, duly highlighted. We will as a company continue to work according to good practices, with the knowledge, experience and requirement of strict compliance with stages, temperatures, pressures, speeds and gas use, in order to continue to obtain the best performance of tools, molds and parts, subject to heat treatment. It is our intention that the application of this “extra energy” is temporary and we strongly hope that the current situation will fade away and that everything will quickly return to normal. This extra energy charge will be withdrawn when energy costs are less than €80/MWh.”

“NOVEMBER 26, 2021, OVAR, PORTUGAL; We have now concluded Part I & II of our series about heat treatment in Portugal, we now move on to Part III which features a company by the name of Ramada ACOS a captive/commercial heat treater located in the northern part of Portugal in the city of Ovar. The firm is another example of a company which offers some of the most “state of the art” heat treatment processes available anywhere in the world. Ramada has been in business  for more than 75 years both as a heat treater and a distributor of steel for Uddeholm. The company has 13 vacuum hardening and vacuum nitriding furnaces all from French furnace builder BMI along with 8 sealed quench furnaces with oil quenching, Interestingly enough at least some of the sealed quench furnaces are from a Brazillian furnace manufacturer by the name of Brasimet which caught our attention-as it turns out because of the historical connection between Portugal and Brazil this is a not uncommon occurence.

The vacuum furnaces include a hardening furnace with dimensions of 1200 mm X 1200 mm X 1800 mm (48″ x 48″ x 72″) with 13 bar nitrogen quenching, a vacuum carburizing system, several tempering units and some nitriding systems. Every single one as mentioned previously was provided by BMI in Lyon, France and in many cases Ramada has been the testing ground for new processes being developed by BMI.

The firm reports business to be very good this year although with the usual trials and tribulations caused by current supply chain issues. In spite of these trials the entire company is posed to grow and expand in 2022.”

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Gord Montgomery, (The Monty Heat Treat News), Paulo Canhola, (Ramada)