RHI Magnesita, a leading player in refractories, and Gerdau, the largest steel producer in Brazil, are joining forces for a joint project using blockchain technology. The project, called Refrac Chain, is designed to measure performance contracts between RHI Magnesita and Gerdau. All data and transactions, which were previously tracked manually, will be recorded in blockchain. A dedicated programme will make financial calculations and measurements.
According to RHI, the two companies started their collaboration because information security is a crucial asset that is increasingly gaining ground in relationships between businesses. In addition, the use of distributed technology has a fundamental impact on companies conducting large volumes of transactions.
Stefan Borgas, CEO RHI Magnesita, commented: "Digitalization and Industry 4.0 are radically changing the way we work together. This impacts all areas of the business – from sales to production. Blockchain will leave no stone unturned in our industry. This key technology not only brings more security and reliability, it redefines the partnership between companies and creates opportunities to trust each other in a way that was not possible before."
The joint project allows for the traceability of processes and information exchange between RHI Magnesita and Gerdau.
"Digitalization and Industry 4.0 are radically changing the way we work together. This impacts all areas of the business – from sales to production. Blockchain will leave no stone unturned in our industry."Stefan Borgas, CEO, RHI Magnesita.
The blockchain platform began operating this year exclusively at a Gerdau site in Minas Gerais, Brazil. The intention is that from there, they can expand the solution to other company operations.
Vinicius Moura, general supply manager at Gerdau, said the project is aligned with the company’s objective of generating value for the entire steel network. “We seek solutions that meet the challenges of the business, in partnership with our suppliers in order to guarantee the operational excellence of our units. This initiative brings reliability, speed and agility to the process, and reflects the journey of digital transformation that Gerdau has been going through in recent years,” he said.
Led by RHI Magnesita and Gerdau, the project helps to guarantee a continually high performance of the refractory products supplied to the steel industry. Tasks that were previously performed manually using spreadsheet calculations will now be done by the platform. RHI believes this will considerably reduce repetitive work, speeding up the process while simultaneously increasing the transparency and security of contractual information.
“Blockchain technology has enormous potential also for our industry. Establishing a secure and holistic data network with Gerdau will enhance even more our historical partnership."Gustavo Franco, CSO, RHI Magnesita.
Gustavo Franco, CSO RHI Magnesita, explains: “Blockchain technology has enormous potential also for our industry. Establishing a secure and holistic data network with Gerdau will enhance even more our historical partnership. By driving workflow efficiencies and automated data transactions, reliable insights are provided to both parties, increasing agility in decision-making and confidence in the operations of our contracts.”
According to the specialists in charge of the project at Criptonomia, Antonio Hoffert and Gleisson de Assis, this is an unprecedented use of blockchain in the steel industry. The new software combines technical, legal, and commercial workflows in one interface. “It builds a common ground of trust, with validation steps by different representatives from both companies and offers space for storing proof in the form of images, documents, text, videos, and audio, thus reducing transaction risks and making the process highly auditable,” says Hoffert. Transparency, security, and data accuracy are some of the key benefits of using the platform. “It is also a replacement for the current way of making contracts, which is a positive step towards decentralization. The use of the system sets up digital signatures that can be monitored and validated by the parties throughout all stages of the process and prevent occasional problems from snowballing into a major ordeal,” Hoffert concluded.
Hoffert said that Refrac Chain is already the largest decentralized application in the Brazilian-based industry. With the expansion of the project over the next five years, the goal is to become the largest industrial blockchain application in the world, he said.