thyssenkrupp has identified three areas of commercial activity which, despite intensive efforts to improve, it says are currently not competitive and which it has placed under review.
From its steelmaking segment this concerns the production of heavy plate. Two other areas within the rest of the group, both linked to automotive applications are also being studied.
The three businesses represent only 4% of the group’s sales, but one quarter of the negative cash flow expected in the current fiscal year, tk says. “We will assess the potential of the three businesses. We definitely see opportunities for their further development, but not necessarily under the umbrella of thyssenkrupp,” ceo Guido Kerkhoff says.
Kallanish had earlier heard criticism from sources at thyssenkrupp’s works council that since the 1990s, the company had missed out on investments to modernise its plate production facilities. A tk Steel spokesman denied this, citing investments made in recent years.
In the first nine months of the fiscal year that began on 1 October, tk Steel Europe took orders amounting to 7.5 million tonnes, significantly less than the 8.3mt in the corresponding previous period. It attributes the fall to restricted booking possibilities in the first quarter. This was primarily due to low Rhine water levels, to slowing market momentum overall in subsequent quarters, and in particular a sharp drop in demand from automotive industry.
The segment’s order value remained basically stable at €7.0 billion ($7.8 billion), as higher average prices year-on-year partly offset the volume decrease. The company notes that “… a negative price trend in the spot market had also had a delayed impact on some of our longer-term contracts in the reporting quarter. This, plus significantly higher raw material costs, especially for iron ore, led to a fall in earnings to €77 million from €586m a year earlier at tk Steel Europe.”
