German steel stockholder Kloeckner is further driving its path to digitalization and wants to grow by taking over independent stockholders and digitalizing them, CEO Gisbert Ruehl told S&P Global Platts, Aug. 14.
During a press call on the company’s second-quarter results, Ruehl said online retailer Amazon would be a role model for core process automation and that Kloeckner buys from mills and sells to buyers through its own digital channels.
Asked by Platts which competitors would be suitable for a takeover and the timeline of such an undertaking, Ruehl said independent stockholders and steel service centers would be a good start and that there were and had been preliminary talks going on “here and there” when opportunities arose.
“But we are not ruling anything out,” Ruehl said. There have been reports in the past stating that Kloeckner might be eyeing German steelmaker Thyssenkrupp’s distribution arm Materials Services, but Ruehl has repeatedly highlighted that the unit would be too big to be taken over by Kloeckner alone. He added M&A would be a topic for next year under the leadership of incoming ex-Thyssenkrupp CEO Guido Kerkhoff who will take up Ruehl’s role on September 1.
Although Kloeckner was able to drive steel sales through its digital platform further, shipment volumes went down 27.6% year on year to 1.1 million mt in Q2 due to the impact of the coronavirus and related lockdown measures.
For the second half of 2020, Kloeckner expects real steel demand to drop 20% in its biggest customer regions, the US and Europe. Kloeckner sees an increasingly negative outlook for the energy industry in the US, and the automotive and shipbuilding sectors in Europe. The only positive – albeit marginal — outlook is expected for the shipbuilding industry in the US.
The restructuring program that started in March will reduce the overall workforce of Kloeckner by over 1,200 employees, of which 50% will be cut due to digitalization. The company will further close 19 sites as part of network optimization initiatives, most of these are in France.
— Laura Varriale
