Comprehensive action plan geared to sustainable profitability based on major structural improvements in sales, production and performance
Rome/Terni – Today Board Members of ThyssenKrupp’s Business Area Materials Services and Acciai Speciali Terni management met Italian authorities and Trade Unions in order to present and discuss the industrial plan developed to re-establish AST as a sustainable player in the stainless steel industry
Over the past years, AST has incurred significant losses mainly due to adverse trading conditions, structural inefficiencies including product mix and marketing restrictions.
AST, transferred to ThyssenKrupp end of February 2014, was integrated into the Business Area Materials Services in order to best benefit from its presence in the international markets.
Within the last months, Materials Services together with the local management have undertaken a detailed analysis to identify optimal strategic options for AST: It was decided to implement a comprehensive strategic action plan to re-establish sustainable profitability at AST, in spite of the challenging market situation and especially the existing overcapacities.
The initiatives comprise cost reductions in all areas – operational, structural, sales and personnel – of more than € 100 million per year and include a headcount adjustment of around 550 employees.
The cost reductions are complemented by a new market approach leveraging the existing distribution network and end customer access of Materials Services. This facilitates the greater focus on cold-rolled products and a significant rise in sales to end users.
The stringently market-oriented approach forms the basis for the new production concept limiting production volumes to profitable sales only. This includes the increase of the cold-rolling capacities and the improvement of efficiency in the liquid phase, with simultaneous closing of the second furnace in 2015/16. The shut-down of the furnace might be reviewed only if market conditions improve significantly and all targets have been met.
The company firmly believes that the measures are well balanced and urgently required to secure the future for AST and value for its stakeholders. ThyssenKrupp’s Business Area Materials Services will keep on supporting the efforts of the local AST management to successfully deploy the new strategy. Regarding the detailed implementation plans, AST is currently in discussion with the trade unions and other stakeholders.