Contents of this page

Steel in figures
All figures relate to continuing operations. * before taxes and minority interest
			2002/2003		2003/2004
Order intake	million €		11,542		14,329
Sales	million €		11,664		13,700
EBITDA	million €		1,282		1,745
Income*	million €		439		911
Employees (September 30)			47,199		46,630

Steel pursues a consistent strategy of systematically catering to the requirements of its globally active customers and continuously developing its own core capabilities. On the basis of technological expertise, favorable locations, state-of-the-art facilities and highly qualified employees, we aim to further expand our good position in the international steel industry - through increased efficiency, service focus, organic growth, strategic alliances and collaborations. Higher-value products account for more than 80% of sales in Carbon Steel and 90% in Stainless Steel. In these demanding market segments we wish to defend our leading international positions.

With portfolio optimizations and permanent performance improvements in all business units, we have created good conditions for contributing a positive EVA to the Group on a sustained basis. The improvement programs combined under the umbrella of ThyssenKrupp best received a further boost from initiatives such as WorkPro and Project 2006 at Carbon Steel together with 3S (Success in Stainless Steel).

System partner to our customers

A central success factor in the Steel segment is technology leadership in processes and products. Our innovations and development projects are strictly geared to the requirements of our key customer groups. In flat carbon steel the automobile industry is the technology driver, but we also explore new avenues with our customers in the construction and domestic appliance sectors as well as in the aerospace, chemical, and process engineering industries. By bringing together material, design and production technology, Steel acts as a system partner capable of integrating the know-how from various disciplines and developing holistic solutions for customers.

Added to this is an income-oriented investment policy to which the segment owes its highly cost-effective and globally competitive facilities. In Duisburg, the central location of the Carbon Steel business unit, we will be building a new replacement blast furnace and relining another in the next few years. With only a slight increase in capacity, this will secure our supply of hot metal on a long-term basis and further reduce the environmental impact and dust emissions thanks to the use of state-of-the-art technology.

The Steel segment aims to strengthen its market position in core business areas through organic growth. In this, Carbon Steel focuses on businesses close to the market. Examples include the forward strategy of Rasselstein involving the expansion of tinplate coating capacities at the Andernach location and the doubling of tailored blank production capacity in Duisburg. In both cases we are taking into account the strong growth in demand for steel products meeting high technological requirements.

On the international markets the segment's operating companies strive to be reliable and competent partners to their global customers in industries ranging from vehicle construction to electronics. To offer these customers the high-quality supplies and services they have come to expect close to their production sites around the globe, the segment is organized on an international basis. For example, Carbon Steel has steel service centers and tailored blank production sites in Europe, the USA, Mexico and China. Following the acquisition in fiscal 2002/2003 of the Galmed hot-dip coating line in Spain, a further key coating facility went into operation this year in China. The new TAGAL hot-dip galvanizing line produced its first coil in December 2003 and will supply the Chinese auto industry with high-quality flat products. In the next few years we aim to develop the Chinese market by investing in service centers and further tailored blanks facilities.

Global presence expanded

Stainless Steel is likewise represented with production sites, service centers and sales offices throughout the world. In the core market of Western Europe, stainless capacities have been moderately expanded in recent years with a view to participating in market growth. We also intend to increase our capacities in Mexico. The expansion of activities in China is a top priority. Investment in the expansion of the Shanghai Krupp Stainless plant will continue as scheduled. In the current fiscal year cold strip capacity will increase from 80,000 to 290,000 metric tons. In parallel with this we are intensifying sales activities by setting up service centers and sales offices as well as offering technical advice to customers. In Europe and North America, too, Stainless Steel is in the process of further optimizing its international sales strategy. The sales, distribution and service centers are being expanded and reorganized. An important step in strengthening the worldwide sales network will be the building of a stainless distribution center in southern China.

Strategic focus on growth

In the strategic development of the segment we are concentrating our efforts entirely on the two pillars Carbon Steel and Stainless Steel. Accordingly, the electrical steel activities in the Special Materials business unit were restructured and now comprise only the grain-oriented products. The non-oriented products, which are mainly used in electric motors and generators, are now integrated in Carbon Steel. For the specialty steel long products and nonferrous metal wire activities of the Special Materials business unit, we have either already implemented best owner solutions or plan to do so shortly as part of the portfolio optimization.

We will continue the structural and operating optimizations in the Carbon and Stainless Steel business units in the future and focus our strategy even more sharply on internal and external growth. As a result, ThyssenKrupp Steel will contribute to the reorganization of both the European and international steel industry.