Salzgitter Shakes Up Company Structure, Partners With Volkswagen to Supply Low-Carbon Steel for EVs
03/22/2022 - German steelmaker Salzgitter AG announced a reorganization of its steelmaking operations, as well as a new agreement with Volkswagen Group to supply low-carbon steel for future vehicles.
In an official press release, Salzgitter said that, effective 1 April 2022, the company’s steelmaking divisions will be divided into two new production units: Steel Production and Steel Processing. The Steel Production will consist of primary operations at Salzgitter Flachstahl GmbH, Peiner Trager GmbH and DEUMU Deutsche Erz- und Metall-Union. The Steel Processing unit will house two of Salzgitter’s heavy plate mills as well as the former Mannesmann Business Unit’s precision tube, line pipe, and stainless tube mills and joint ventures.
Salzgitter said the new structure will streamline operations and further accelerate its SALCOS (Salzgitter Low CO2-Steelmaking) decarbonization strategy. Through the SALCOS project, Salzgitter aims to reduce its carbon emissions by more than 95% by 2025 through adoption of hydrogen-based direct reduction technology.
In a separate announcement, Salzgitter said that it signed a memorandum of understanding (MoU) with automaker Volkswagen Group to supply low-carbon steel for its fleet of vehicles beginning in 2025.
Volkswagen plans to use Salzgitter’s low-carbon steel to produce its Trinity1 electric vehicle model.
Salzgitter said the MoU will also establish a future closed-loop steel recycling program between the two companies. Residual scrap from Volkswagen’s Wolfsburg, Germany, manufacturing plant will be transported directly to Salzgitter’s nearby steel works, where it will be re-melted and reprocessed into new automotive steel and shipped back to Volkswagen.
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