[Article publié le vendredi 26 avril 2024 à 11h37 et mis à jour à 16h30] In difficulty for years, Thyssenkrupp, Germany’s leading steel producer, will sell 20% of its steel activities to billionaire Daniel Kretinsky’s holding company, EPCG, as announced this Friday. The two companies are also discussing the acquisition of an additional 30%, which could allow the Czech billionaire to increase the steelmaker’s capital to 50%. The objective would then be to form an equal 50/50 joint venture between the two partners. The price of the transaction, however, was not revealed.
With this operation, the group’s boss, Miguel Lopez, indicates that he aims to avoid “economic layoffs” in the activity. He also hopes it will bring the steel division back towards “autonomy” And ” Success “. Thyssenkrupp currently employs around 27,000 people.
The United States extends the exemption from customs duties on European steel until 2025
The steel industry is in trouble
ThyssenKrupp’s steel business has been facing difficulties for years, linked to global overproduction of steel and costs that are too high compared to competition, particularly from China. This branch recorded an operating loss of 143 million euros, during the first quarter of its staggered 2023/2024 financial year (between October and December), compared to a profit of 90 million last year, according to figures presented mid February.
Faced with these difficulties, the group is banking on moving upmarket in this branch, with the development of clean steel, a product based on hydrogen from renewable energies. The company needs massive investments to initiate this transition and was therefore looking for a partner with the financial resources necessary to carry out this project. Which explains this transaction with Daniel Kretinsky’s holding company – which has also officially taken over the reins of Casino in France and is now considering getting its hands on British postal operator Royal Mail. Previously, the German group had tried to make this activity independent of others. It notably entered into negotiations to this effect in 2021 with the British Liberty Steel – in vain.
Social plan in sight at Casino: in Saint-Etienne, the trauma of Manufrance resurfaces
Future reduction in production and workforce
In addition, Thyssenkrupp has, for several months, been suffering from rising energy costs, record interest rates and the sharp drop in the prices of certain materials it sells, against a backdrop of weak demand for European industry in crisis. To this are added “the difficulties of the market environment, marked by geopolitical and commercial tensions”, for a company dependent on exports. So much so that, in its delayed first quarter, the company experienced a net loss, group share, of 314 million euros, compared to a profit of 75 million euros last year for the same period. It also saw its turnover decline sharply, falling by 9% to 8.2 billion euros.
Emmanuel Macron’s speech at the Sorbonne: “We must be lucid about the fact that our Europe can die”
In this context, the steelmaker announced in mid-April that it would reduce its production capacity and cut jobs at its historic site in Duisburg, in western Germany. However, he did not specify the number of positions affected. A decision that was all the more poorly accepted by the unions as the company had already eliminated nearly 4,000 positions as part of a previous restructuring plan announced in 2020, in the midst of the coronavirus pandemic, which at the time represented more than 10% of its workforce.
An entire industry in difficulty
With this acquisition, Daniel Kretinsky, already very present in the energy sector, said he wanted to bring “ an important contribution to the decarbonization of the steel industry ”, according to the press release. EPCG therefore intends to interfere in “ strategy formulation and implementation » of ThyssenKrupp Steel, explained Jiri Novacek, member of the management board of the holding company.
Thyssenkrupp is not the only group in difficulty during this period. Particularly due to the energy transition, the entire old European steel industry is experiencing difficulties. Because it is one of the industries that contributes most significantly to global warming.
This metal is responsible for nearly 8% of global CO2 emissions due to the use of coal: each ton of steel produced in a traditional blast furnace emits nearly 2 tons of CO2. It is therefore necessary to renovate existing factories. However, many have been poorly maintained in recent decades and the costs are therefore exorbitant. Steelmakers are being helped by the European Union, which has already announced 9 billion euros in public aid to finance the decarbonization and modernization of this industry.
Alongside the restructuring of the old steel industry, at least five completely new greener steel factories are announced in the coming years: three in Scandinavia, one in France and one in Spain. “Their financing is assured, the technologies are proven, which means that the oldest and most fragile steel plants in Europe will probably be forced to close,” estimated Marcel Genet, steel industry expert and founder of the company Laplace Conseil, at the end of February. The end of the crisis is therefore still far away.
(With AFP)
