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Company News, 2008-01-28, 11:00 AM

ThyssenKrupp criticizes EU Commission’s climate protection plans

Together with 300 guests, ThyssenKrupp Steel AG inaugurated its new blast furnace 8 in Duisburg on January 28, 2008. The new unit is part of a 340 million euro program to secure hot metal production for the company’s German plants. Christa Thoben, Minister for Economic Affairs, SMEs and Energy, represented the state government of North Rhine-Westphalia at the ceremony. “These days a lot is talked about the responsibility of businesses, especially the “big players”, in connection with globalization. I am therefore all the more pleased to be at ThyssenKrupp here today, a company which is demonstrating impressively how to exploit opportunities on the world markets without cutting off your industrial roots at home” said the minister in her speech. Dr. Ekkehard D. Schulz, Chairman of the Executive Board of ThyssenKrupp AG, said: “This program will ensure Duisburg remains one of the world’s most efficient steelmaking sites with an ideal plant configuration.” Dr. Karl-Ulrich Köhler, Chairman of the Executive Board of ThyssenKrupp Steel AG, stressed the importance of the investment for the labor market: “In the medium term this will secure 1,200 direct jobs and a further 3,600 indirect jobs in the region.”

In their speeches Dr. Schulz and Dr. Köhler criticized the EU Commission’s climate protection plans, presented in Brussels on January 23, 2008, for the period 2013 to 2020. The consequences would be a lack of planning certainty for investments, drastic increases in energy prices and a massive threat to jobs. ThyssenKrupp therefore urges the Commission to grant the necessary exemptions for the steel industry bindingly and quickly and at least for a full trading period. Dr. Schulz stressed: “Climate protection is an important issue at ThyssenKrupp. But climate protection and competitiveness must be in harmony.”

On its 9.5 square kilometer site in Duisburg ThyssenKrupp Steel operates four blast furnaces which produce around 11.5 million tons of pig iron per year. Blast furnaces Schwelgern 1 and 2 are among the biggest of their kind in the world. The new blast furnace 8 replaces blast furnace 4, built in 1963, which will serve as a spare in the future. The blast furnace program also includes the extensive modernization of the existing blast furnace 9. Furnaces 8 and 9 will be operated as twin units with common control and raw material supply systems. Compared with the old constellation productivity will increase by roughly 28 percent.

ThyssenKrupp Steel has invested 250 million euros in the construction of blast furnace 8 alone. Around 80 million was spent on pollution control equipment. All emissions are well below the limits set by the relevant environmental standards.

In addition to the blast furnace program at the Duisburg site, ThyssenKrupp Steel is currently investing around six billion euros in a new steel mill in Brazil, a downstream processing plant in the USA and expansion of its processing and coating lines in Germany. “We are making these investments from an extremely solid economic base,” said Dr. Karl-Ulrich Köhler. Germany’s biggest steel producer, which employs around 39,500 people, generated record earnings for the fourth year in a row in fiscal 2006/2007 ended September 30. With profits of 1.66 billion euros, ThyssenKrupp Steel contributed roughly half the total earnings of the ThyssenKrupp Group. Compared with fiscal 2005/2006, sales increased by nine percent to 13.2 billion euros. ROCE (return on capital employed) was 26.9 percent.

Key factors affecting earnings were the good state of the market, with steel users in Europe recording particularly strong growth, and internal programs to increase efficiency. By contrast, the situation on the raw material markets remained tight. The price of fine ore, for example, increased by 9.5 percent in the past fiscal year. There were price leaps of over 50 percent for alloying additives such as ferromanganese. Ocean freight rates and prices for scrap and blast furnace coke also increased.

ThyssenKrupp Steel has begun the new fiscal year successfully. With key customer groups enjoying strong workloads, high shipment levels are again expected in 2007/2008. “The sales growth will also result from higher price levels. The latest positive signals from the market give us confidence that we can achieve this goal in the next quarter already and thus alleviate cost pressure for raw materials and energy. In addition we are being impacted by the startup costs for our new plants in Brazil and Alabama as well as restructuring costs for the Metal Forming business,” continued Dr. Köhler.

This press release is also available on the internet at

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