Hüttenwerke Krupp Mannesmann (HKM) will become a wholly owned subsidiary of Salzgitter after the conclusion of “intensive and meticulous negotiations” with the other co-shareholders, thyssenkrupp Steel Europe and Vallourec. The three parties signed contracts on 8 July, Kallanish learns.
Tk Steel and Vallourec had long announced their intention to divest their stakes, while Salzgitter from the outset expressed continued interest in the slab mill in the south of Duisburg. The transaction, and in fact the survival of the mill, is being accompanied by a profound downsizing and job cuts.
Salzgitter plans to invest in an electric arc furnace at HKM to transform the site, make it future-proof, and reduce CO2 emissions from steel production by 90% over the long term. This transition will be accompanied by a significant reduction in the number of employees. The plan is to cut back from the current approximately 3,000 to about 1,000 jobs in the long term. Without these painful job cuts, Salzgitter would not have been able to complete the acquisition on its own, it states.
“We took the time needed to negotiate with the co-shareholders to date regarding the continuation of HKM under our sole responsibility. Given the complexity of these discussions and the great significance of the outcome for the employees in Duisburg, exacting thoroughness clearly took precedence over speed in this process,” says Salzgitter chief executive Gunnar Groebler.
HKM’s existing supply contract with thyssenkrupp Steel will expire at the end of 2028, rather than at the end of 2032 as previously planned. The new arrangement will also mean a shift in slab sales to third parties, which has already been part of HKM’s business since the closure of Vallourec’s German plants.
HKM’s slabs are considered particularly suitable for the production of tubes. Salzgitter executive Andreas Betzler, managing director of Salzgitter’s tubes subsidiaries Mannesmann Precision Tubes, Mannesmann Grossrohr and Mannesmann Line Pipe, will therefore join the management team at HKM.
Author: Christian Koehl Germany
