As part of the implementation process of its Steel Strategy 20-30, German steelmaker thyssenkrupp, having received investment approval, is about to award contracts for the construction of new core units at its Duisburg and Bochum sites. The company aims to expand its premium steel range and thereby strengthen overall competitiveness.
The steelmaker plans to convert the casting rolling line in Duisburg into a new continuous casting line with a downstream hot strip mill for which the main components are new. The existing continuous casting line 3, also in Duisburg, will be rebuilt to optimize slab production. Investments are also planned at the company’s Bochum site where the intention is to build a new double reversing mill and an annealing and isolating line. It is claimed that both will strengthen the Bochum site’s position as a competence centre for e-mobility steels.
The projects involve an overall investment volume in the high three-digit million range, the company claims, and completion of all projects is scheduled for the end of 2024.
According to thyssenkrupp, the investment package for the steel business is the biggest since the construction of the Schwelgern coking plant in 2003.
The company says that its steel business is sharpening its focus on technology and quality leadership and intends to further strengthen an already strong position in Europe. To reach these goals and to realize the full earnings effects of the investments, further ‘significant cost cuts’ are on the cards as thyssenkrupp Steel sees no alternative and believes that the financial consequences of COVID-19 will impact the business for many years to come.”
The company also says that investments and cost cutting are two sides of the same coin and that the basis for the investments is the “Zukunftspaket Stahl” collective agreement concluded with the works council in the spring of 2020. Among other things, the agreement provided for the implementation of the investments as part of Strategy 20-30 along with the loss of 3,000 jobs.
“thyssenkrupp AG has now approved the funds for important investments in our production network“, explained Bernhard Osburg, chairman of the executive board of thyssenkrupp Steel Europe. “This is a strong signal for the steel business and a strong mark of confidence in difficult times. The projected investments enable us to develop our position in important future markets, thus making our business fit for the future. The Strategy 20-30 is the right approach for this. But investing is not enough: the pandemic has once again dramatically exacerbated our financial situation. We have to join forces with our employees and the works council to close the financial gap caused by the corona crisis in the years to come and to limit the repercussions of the pandemic. We will stick to our goal to achieve the profitability originally targeted in the Strategy 20-30. All parties involved must be aware of the fact that we will also have to consider further job and cost reductions, if we do not want to put at risk what has been achieved and agreed so far”.
According to thyssenkrupp, the main objective of Steel Strategy 20-30 is to produce an even higher-value product portfolio, while optimizing the cost structure. The growing requirements of automotive customers – crash-relevant sheet steel for the safety architecture of vehicles, improved surfaces, or thinner and higher-performance steels for e-mobility – play an important role in this context, says the company.
A targeted revamp and ‘flexibilization’ of its production network is planned, says thyssenkrupp. The aim is to secure the company’s position as a leading supplier in terms of quality and performance in the European market. Slab and hot strip production is one focus and includes the division of the casting rolling line at the site in Duisburg. Within the value creation network, this plant plays a key role supplying the downstream units. Long term, however, the qualitative capabilities of the casting rolling line commissioned more than 20 years ago will no longer be sufficient to meet future customer requirements. The unit, therefore, is now divided into a continuous casting line and a downstream hot strip mill, which will also supply the downstream processing units at thyssenkrupp’s Bochum site, where investment is focused on a new double reversing mill in the cold rolling mill and a new annealing and isolating line, both of major importance as they will serve the fast-growing e-mobility market where thinner and stronger sheet steels are needed to increase the performance of electric motors. The company already claims leadership of the European market and intends to strengthen its position through the planned investments.
“The planned investments will further improve our technological capabilities and the flexibility and reliability of our production network,” said Osburg. “They will enable us to ensure our competitiveness through the quality of our products also in future. This is a strong signal for our customers, whom we will incidentally continue to supply with the usual products during the conversion and new construction work. The next step is to implement the projects. One goal unites us: We want to be a strong, competitive and viable steel company in the Rhine and Ruhr region”.