A few numbers …
The source of these numbers is only our Czech Commercial Register and the Slovak FINSTAT. What do they imply? Bodycote HT is still at the top, followed by Bodycote Slovakia. In total, they control 48% of the commercial market in CZ and SK. However, the results are not accurate, as Bodycote HT does not yet have its financial statements for 2024 registered in the Commercial Register. So for 2024, this is an estimate.
The source of these numbers is only our Czech Commercial Register and the Slovak FINSTAT.
But this overview is interesting. The average profitability of the above 12 heat treatment plants is around 10%, but it is gradually decreasing. To give you an idea, there is a comparison with Bodycote HT, where the responsibility for these numbers until the end of 2013 was on me. The trend is clear. In my time, except for the crisis of 2008/2009, we were used to a profitability of 25-30%. However, the latest figures show a significant downward trend.
The regrouping of industrial activities to military production is not reflected in our industry. The reason is obvious. Basically, we don’t produce anything essential that needs heat treatment, and we just buy most of it. Maybe these numbers are no longer current, they are from 2023, but it was a record year for Škoda. The other big automotive players were not bad either. However, the profitability of carmakers is up to 5%, the best is Hyundai with 7%.
However, this profitability cannot be compared to the profitability of arms companies. They are simply “out of the woods” today, because demand far exceeds supply.
Steel producers are teetering on the edge of profitability. However, this list of companies also includes companies that deal with the recycling of material or its processing, the primary production is somewhere else. For me, the surprise is Crown Metals CZ, formerly Magnesium Elektron CZ. I almost became its founding director. That was at the time when Tim Bell took over the management of Bodycote, and it was really impossible to stand him. Eventually, he was removed and replaced by John Hubbard, one of the best people I have ever known in the field. But that’s another story. However, the future of this field is hidden in the statement of the Steel Union here: (Statement of the Steel Union on the information published in the magazine Respekt | Steel Union).
From the above point of view, the profitability of commercial heat treatment plants is absolutely great. But the numbers for the 12 main commercial heat treatment plants are average. Half of them are well below 10%. And if you add underinvestment, it is necessary to think about whether it is enough for a fundamental restructuring. The permanent decline in the profitability of heat treatment plants is mainly tied to wages, which will be under great pressure, and to energy prices, for which no fundamental change is planned. On the contrary, the carbon tax will be added as an additional cost.
A look at wage development is interesting. These should grow cumulatively by 30 to 50% by 2035. However, since wages above 40% of turnover are already critical in the balance of the heat treatment shops, it will be very interesting to see how the heat treaters will cope with it. The idea of unmanned operation of the heat treatment plant will have to become a necessity.
What does this mean? A period of consolidation awaits us. Increasing the efficiency of equipment use, reducing the number of people, and if possible saving energy. However, this has its limits, which can only be changed by fundamental innovations. But only the best can reach them. And who will they be? Let’s be surprised.
Jiří Stanislav
August 25, 2025
