* Sales to rise to 20 bln euros by 2020, from 12.1 bln
* 500 mln eur to be invested in new north American plant
* Shares rise 1.4 percent (Adds details on new plant, background, updates shares)
By Georgina Prodhan
VIENNA, Dec 19 Austrian steel group Voestalpine plans to boost its sales by two-thirds by 2020 through aggressive expansion in the Americas and Asia to offset sluggish demand and excess capacity in Europe.
The company aims to increase its sales to 20 billion euros ($26 billion) over the next eight years while maintaining profitability, helped by a new half billion-euro plant in North America that will supply cheaper raw materials for steelmaking.
"Voestalpine is not reinventing itself, because we are following a path of value-enhancing growth. But development will come in those areas of the world where growth is to be found," Chief Executive Norbert Eder told journalists on Wednesday.
Voestalpine shares rose 1.4 percent to 27.65 euros by 1155 GMT, outperforming the European base materials index, which rose 0.7 percent.
Eder has been pushing for foreign expansion to help diversify from Europe where, he says, political opposition to plant closures is weighing on efforts to address chronic overcapacity.
Voestalpine now plans to build and buy its way to rapid growth in southeast Asia including China, in south America, and in niche segments in north America, tripling its revenues from outside Europe to 9 billion euros by 2020.
A Europe-wide austerity drive aimed at reducing budget deficits has proved particularly painful for the steel industry because of the accompanying slowdown in demand for cars, appliances and new buildings.
Voestalpine will focus in future more on specialised components and ready-made parts for the energy, automotive and aircraft industries and less on commodity steel.
Eder said roughly half of the planned growth would come through acquisitions, and he did have specific targets in mind, although talks were not sufficiently advanced to give details.
To help keep its core profit (EBITDA) margin at around 14 percent and its operating profit (EBIT) margin around 9 percent, Voestalpine plans to take advantage of cheap North American energy with a new plant to make its own steelmaking materials.
Voestalpine will invest at least 500 million euros in the plant, which will produce iron concentrate for its European steelmaking operations.
"We must see to it that we do not only turn the traditional cost screws," Eder said. "Raw materials are about 60 percent of our total costs."
The plant, which will employ about 150 people, will be built either in the United States or in Canada. A decision on the location is expected in the first quarter of 2013.
Voestalpine last month warned on its 2012/13 profits due to economic uncertainty, saying it now expected operating profit of 1.4 billion instead of 1.5 billion euros, and earnings before interest and tax of 800 million instead of 900 million euros.
It said on Wednesday reaching its 2020 targets was contingent on the global economy's returning to normal. ($1 = 0.7568 euro) (Reporting by Georgina Prodhan; Editing by Dan Lalor and Helen Massy-Beresford)