2023-11-21 21:18:24
The first supports for the two new high-beam furnaces are already in place, and at some distance there are also the cranes for the warehouse in which the slabs are located before these steel bars, which weigh several tons, are further processed into sheets for the automotive industry. Thyssenkrupp’s steel division is building several plants at the Duisburg site for 800 million euros to further process raw steel. An old casting-rolling plant is replaced by a continuous casting plant, behind which a new hot strip mill is connected. Thyssenkrupp Steel Europe wants to increase its casting and rolling capacities and also produce thinner and stronger steels in order to cover orders from the automotive industry for electromobility.
The modernization of the production facilities is scheduled to be completed by the beginning of 2026. It is an important signal, both externally of the will to transform of a company that wants to decarbonize itself – but also internally, after all, the relationship between the traditional Thyssenkrupp group and its core business of steel has long been a complicated one, which always involves the question what the future of the business looks like with its 23,000 employees and 13.2 billion euros in sales. “We are thereby securing the competitiveness of our company and thus also the 14,000 jobs at this location,” said Ali Güzel, the works council chairman in Duisburg, on the occasion of the laying of the foundation stone at the steelworks on Monday evening.
2 billion euro funding has already been approved
The investment comes at a time of particular uncertainty in the industry. “We as the steel industry are under extreme pressure,” said Heike Denecke-Arnold, who is the board member responsible for production at Thyssenkrupp Steel. The most pressing issue is high energy prices, a structural locational disadvantage that is constantly becoming entrenched.
The share of energy costs in the production costs for one ton of slabs is now 5 percent, but after the steel company’s green transformation, the share of energy costs would be up to 50 percent. “This is a complete departure from our current business model,” said Denecke-Arnold. With the plan to no longer burn coal to make steel in the future through the construction of so-called direct reduction plants, but to use hydrogen in production, the energy requirements of the company, whose steelworks in Duisburg still account for 2.5 percent of carbon dioxide (CO2) emissions, are increasing ) is in Germany.
The steel division of the Essen-based group is not directly affected by the budget ruling of the Federal Constitutional Court. The 2 billion euro funding from the federal and state governments for the construction of the direct reduction plants and the ramp-up of a hydrogen economy in the Ruhr area has already been approved. Nevertheless, Thyssenkrupp has finally and probably irrevocably begun its transformation.
Negotiations with Daniel Křetínský
This is precisely why Bernhard Osburg, the CEO of the steel division, called on Chancellor Olaf Scholz (SPD) to hold a “transformation summit” with the federal government, states, unions and companies. Ultimately, even more actors are involved in funding for industrial transformation. Suppliers are waiting for results, investments are at risk. There should now not only be a political financing debate, but the federal government must decide how the transformation of industry in Germany should proceed. “If that doesn’t succeed, Germany will ultimately have to write off its climate goals,” said Osburg. Above all, it is about a certain speed in competition with other countries in which heavy industry is also undergoing a green transformation. “Many companies on the supplier side are waiting for orders,” said Osburg, adding that there is a lack of planning security.
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The Economics Minister of North Rhine-Westphalia, Mona Neubaur (Greens), also emphasized that although the funding was for Thyssenkrupp, other locations also needed security. “We also have to think of something about how we can ramp up the hydrogen economy,” said Neubaur. “In the end, it’s about ensuring that your daughters and sons can still find good work here in the future,” she said to the steel workers who were gathered at the plant to mark the laying of the foundation stone.
What this work will look like still remains very open, despite the investment that has encouraged employees. Finally, it’s also about ownership, as the group is negotiating with the Czech investor Daniel Křetínský about a 50 percent stake in the steel division. A lot is still open, there are neither financing nor employment commitments, and the capital resources are still in question.
The political uncertainties are unlikely to simplify the negotiations. Osburg did not want to comment on this, but referred to Thyssenkrupp’s annual press conference on Wednesday. The future of steel is uncertain – something that has a tradition in the company.
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