German steel conglomerate, thyssenkrupp has announced plans to split its Duisburg operations into a hot strip mill and a continuous casting line and add new facilities at its Bochum site. Both these investments form the focus areas of the company’s efforts to spin off its steel unit rather than sell the ailing business.
The steelmaker indicated on Feb 10 that the division of the Duisburg site would help the company improve its focus on slab and hot strip production. The company will invest in converting Duisburg’s casting rolling line into a continuous casting line before the division.
The company also plans to build a new double reversing mill as well as an annealing and isolating line at its Bochum site. Thyssenkrupp intends to complete these projects by 2024 and while it did not disclose the exact investments, it said they would fall in the “high three-digit million range.”
Duisburg’s conversion to a continuous casting line will include rebuilding casting line 3 to improve slab production. The hot strip mill is expected to supply to the downstream processing units in Bochum, which will also boast a new double reversing mill at its cold-rolling mill to make thinner and stronger sheets for the automotive sector.
Better-than-expected Q1
Thyssenkrupp also raised its full-year forecast, projecting a break-even in its earnings during the fiscal. The company’s guidance was boosted by almost all its businesses reporting growth in revenue and stronger order books during Q1 FY2021, ending on December 31, 2020.
The company’s European steel division posted a 17pc growth in orders and a 7pc increase in sales during the first quarter compared with Q1 FY2020, on improving demand from the automotive and appliance sectors.
The steelmaker’s Materials Services division, which also includes its steel unit grew after steel prices and volumes improved during the quarter. However, the stronger demand from other sectors was offset by the continuing weakness in the aerospace industry, because of which this division’s order book and sales declined in Q1 FY2021 by 10pc and 12pc, respectively, on an annual basis.
The company’s industrial components business, like the Steel Europe division, profited from the growing demand and consumption of the auto industry in the first quarter. This division’s order book grew 19pc compared to the same quarter in the previous fiscal, while its sales increased by 14pc during the same time frame.
The German conglomerate’s consolidated net loss decreased by €239mn ($289.82mn) to €125mn.
(€1=$1.21)