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ThyssenKrupp Inaugurates New Blast Furnace, Criticizes EU Climate Protection Plans
01/29/2008 - ThyssenKrupp Steel AG inaugurated its new Blast Furnace No. 8, which the company installed as part of a 340-million-euro program to secure hot metal production for its German plants.
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ThyssenKrupp Steel operates four blast furnaces on its 9.5-square-kilometer site in Duisburg; together, these four blast furnaces produce around 11.5 million tons of pig iron per year.
Blast Furnaces Schwelgern 1 and 2 are among the biggest of their kind in the world. The new Blast Furnace No. 8 replaces Blast Furnace No. 4, built in 1963, which will serve as a spare in the future.
The company’s blast furnace program also includes extensive modernization of the existing Blast Furnace No. 9. Furnaces 8 and 9 will be operated as twin units with common control and raw material supply systems. The new configuration will facilitate a productivity improvement of roughly 28% compared with the old setup.
ThyssenKrupp Steel has invested 250 million euros in the construction of Blast Furnace No. 8 alone, including around 80 million for pollution control equipment. According to the company, all emissions are well below the limits set by the relevant environmental standards.
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“This program will ensure Duisburg remains one of the world’s most efficient steelmaking sites with an ideal plant configuration,” said Ekkehard D. Schulz, Chairman of the ThyssenKrupp AG Executive Board.
Karl-Ulrich Köhler, Chairman of the Executive Board of ThyssenKrupp Steel AG, stressed the importance of the investment for the labor market: “In the medium term this will secure 1200 direct jobs and a further 3,600 indirect jobs in the region.”
In their speeches, Schulz and Köhler also criticized the EU Commission’s climate protection plans as presented in Brussels on January 23, 2008, for the period 2013 to 2020. According to Schulz and Köhler, the plans would result in a lack of planning certainty for investments, drastic increases in energy prices and a massive threat to jobs. ThyssenKrupp urged the Commission to grant the necessary exemptions for the steel industry bindingly and quickly and at least for a full trading period. Schulz stressed: “Climate protection is an important issue at ThyssenKrupp. But climate protection and competitiveness must be in harmony.”
In addition to its blast furnace program at the Duisburg site, ThyssenKrupp Steel is also investing around six billion euros in a new steel mill in Brazil, a downstream processing plant in the USA and expansion of its processing and coating lines in Germany. “We are making these investments from an extremely solid economic base,” said Karl-Ulrich Köhler.
Germany’s biggest steel producer, which employs around 39,500 people, generated record earnings for the
fourth year in a row in fiscal 2006/2007 ended September 30. With profits of 1.66 billion euros, ThyssenKrupp Steel contributed roughly half of ThyssenKrupp Group’s total earnings. Compared with fiscal 2005/2006, sales increased by 9% to 13.2 billion euros, and ROCE (return on capital employed) was 26.9%.
According to the company, earnings were supported by the strong market, with steel users in Europe recording particularly strong growth, as well as the company’s internal programs to increase efficiency. These effects helped to offset the effect of the raw material market, which, according to the company “remained tight,” as evidenced by a 9.5% increase in the price of fine ore and price leaps of over 50% for alloying additives such as ferromanganese over the past fiscal year. Ocean freight rates and prices for scrap and blast furnace coke also increased.
With key customer groups enjoying strong workloads, ThyssenKrupp Steel anticipates high shipment levels again in 2007/2008. “The sales growth will also result from higher price levels,” continued Köhler. “The latest positive signals from the market give us confidence that we can achieve this goal in the next quarter already and thus alleviate cost pressure for raw materials and energy.
“In addition,” concluded Köhler, “we are being impacted by the startup costs for our new plants in Brazil and Alabama as well as restructuring costs for the Metal Forming business.”
