German steel companies thyssenkrupp Steel and Salzgitter have signed a framework agreement on joint ownership of the Hüttenwerke Krupp — Mannesmann (HKM) plant in Duisburg.
After intense negotiations mediated by the former German Prime Minister, the two groups reached an agreement to transfer a 50% stake in tk Steel to Salzgitter effective June 1. Currently, Salzgitter owns 40% of HKM shares, and the remaining 10% belongs to Vallourec, which has long stated that it wants to exit the joint venture. In order for the agreement between the major owners to take effect, Vallurek is also selling its stake to Salzgitter
.HKM, one of Germany's largest slab plants with a potential capacity of more than 5 million tons of steel per year, has long been problematic for tk Steel's parent company thyssenkrupp AG. HKM has faced serious difficulties in its quest to transform its steel division into a separate independent company.
Salzgitter has repeatedly stated that he will continue to cooperate with HKM if the interested parties agree to the terms. HKM slabs are used as raw materials for the production of some Salzgitter pipes. Salzgitter says it will continue to manufacture HKM on a smaller scale.
One of HKM's problems in the market is slab prices, says Callanishou, an experienced player. But due to EU market barriers and a shortage of imported slabs, he said, HKM may soon face the fact that European distributors will rebuild.
The announcement was sent out on Friday afternoon, followed by a comment from IG Metall. The union welcomes this news as "a good signal for HKM employees, for the state of North Rhine—Westphalia and for the German steel industry." The agreement "provides an important value chain in our country and beyond." The union emphasizes that it appreciates that the parent groups fulfilled their responsibility for the employees. But trade union leaders say they have a difficult path ahead.
"After difficult negotiations and disputes, the real work is only starting now," says Thomas Hay, employee representative on the HKM Supervisory Board.
Author: Christian Kel Germany
Kallanish.com
