The Executive Board of ThyssenKrupp AG informed the Supervisory Board of ThyssenKrupp AG of its decision, in parallel with further technical and commercial optimization, to examine strategic options in all directions for the plants of Steel Americas in Brazil and the USA. The Supervisory Board noted this with assent. The background to this decision is that the economic parameters have changed significantly since the development of the strategy of an integrated network with the slab plant in Rio de Janeiro and the processing plant in Mobile, Alabama.
Dr. Heinrich Hiesinger, Executive Board Chairman of ThyssenKrupp AG said “We have said that we want to sustainably improve our performance and carry out regular strategic reviews of all our businesses. This also applies to our biggest challenge Steel Americas. We continue to believe that both plants will hold leading positions in their respective markets in terms of technology and conversion costs. But since the plans for the project were made the economic parameters both in Brazil and in the USA have changed from our original assumptions. There are clear reasons that now call this strategy into question. We therefore have to examine whether it still makes sense strategically to operate the two plants in a common integrated network.”
The strategy for Steel Americas developed in 2007 was based on two basic premises: Slabs were to be produced at low cost in Brazil and shipped with cost advantages to the USA. After processing they would then be sold on the NAFTA target market with a corresponding price premium reflecting their high quality. In addition to the general business downturn due to the financial and economic crisis, the different rates of growth in the two regions are calling this strategy into question. Whereas the US economy is showing no major momentum, Brazil is enjoying strong growth. This is having corresponding effects on the cost and demand situation in the two countries.
ThyssenKrupp will move forward with the ramp-up of the two plants. Clear progress has already been made on this. The plant in Brazil produced around 1.7 million tons of high-quality slabs in the first half of the current fiscal year. In the same period, the US plant shipped around 1.4 million tons of steel to customers. The start-up of coke oven battery C is proceeding to plan. As a result it will be possible to complete the operational ramp-up by the end of the current fiscal year, after which the optimization phase will begin.