Salzgitter’s chief executive officer Heinz Joerg Fuhrmann recently laid to rest rumors about the steelmaker forming an alliance with the German conglomerate thyssenkrupp.
According to a media report, Fuhrmann negated benefits to Salzgitter from the mega-merger rumors that began circulating after thyssenkrupp announced the need to restructure or sell its steel segment.
thyssenkrupp’s steel unit faces an operating loss of €1bn ($1.2mn) in 2020 while Salzgitter is expected to achieve a pre-tax loss in a low to mid-triple digit euros during the year. The latter’s steel production could drop by more than 10pc this year due to its H1 2020 production losses.
In this difficult environment, a merger would require extensive restructuring by Salzgitter, which already has a strong long-term growth potential despite the temporary setbacks by the COVID-19 crisis, according to Fuhrmann. Moreover, he did not regard the merger as a desirable one operationally. He also viewed the current business environment as a difficult one for steel demand and profitability at least until the end of Q1 2021.
However, Salzgitter will pursue cooperation in environmental projects with other German steel companies and the country’s largest union, IG Metall, according to media reports.