Swiss Steel has disclosed new details about its previously announced cutback plans for its German unit, Deutsche Edelstahlwerke (DEW).
It plans to sell, or close, two of its four plants in Germany; Hagen and Krefeld. If the negotiations do not lead to a successful conclusion, it intends to cease operating the sites. The comprehensive restructuring is intended to be implemented in stages over approximately the next two years.
DEW consists of four long-established sites, formerly owned by thyssenkrupp, each with different capabilities, production stages and equipment configurations: Hagen, Witten, Siegen and Krefeld. This is a technologically diverse but complex production network, with high fixed costs, numerous material transfers between sites and substantial investment requirements. At today’s structurally lower sales volumes, the available capacity can no longer be sufficiently utilised, Swiss Steel says.
Since 2021, market volumes have declined significantly across all product groups relevant to DEW, as the European long steel market has become structurally smaller, while key customer industries remain under pressure, Swiss Steel explains. DEW’s production system was designed for significantly higher volumes, the parent writes in a statement seen by Kallanish.
Over recent years, DEW has already initiated extensive improvement and restructuring measures, which have not sufficiently succeeded in returning the company to operating profitability, the parent notes. Its aim is to establish an industrial structure that is competitive over the long term. To achieve this, the remaining volumes will be concentrated on fewer facilities with higher utilisation, namely the works in Siegen and Witten.
Steelmaking operations will be concentrated in Witten, while operations at the Siegen steelworks will be temporarily suspended. If steelmaking at Siegen is discontinued for good, it would affect 400 of the 1,000 employees at the site, says local broadcasting station WDR, citing union IG Metall.
Witten offers the broadest product portfolio and covers all three speciailty steel segments – engineering steel, stainless steel and tool steel. Witten is already positioned towards higher-margin and growing end markets such as civil aviation and the defence industry, and is less dependent on the shrinking automotive industry, the statement says.
