Company News, 2003-04-16, 02:00 AM
Restructuring at Edelstahl Witten-Krefeld: Plants must become more competitive
Edelstahl Witten-Krefeld GmbH, a subsidiary of ThyssenKrupp Steel specializing in specialty steel long products, is to implement an extensive restructuring and efficiency enhancement program by the end of this fiscal year. Summing up the aims of the program, Dr. Jürgen Olbrich, Chairman of the Management Board, said: "We have to significantly improve the earnings situation, which is being impacted by rising raw material, energy and personnel costs, and make our plants in Witten and Krefeld more competitive."
The program was developed by a team of people from the company, ThyssenKrupp Steel AG and the management consultants Roland Berger. The planned measures, which will have to be fleshed out in the coming months, cover the following areas:
･ Production processes are to be better coordinated. Logistics operations between the two plants in Witten and Krefeld result in high costs. Larger investments are planned to reduce process complexity, for example the construction of a soaking pit in Witten to decouple the melt shop from downstream processing steps and a bar peeling machine for mandrel rods at the same location.
･ Leaner organizational structures are to be introduced in the central plant maintenance, quality assurance and sales functions. The remaining overhead areas are also to be downsized. The plan is to pool functions and create flatter hierarchies. A new inner-plant logistics concept is being developed to significantly reduce inventories of semi-finished and finished products.
･ Production at Edelstahl Witten-Krefeld will be focused on high-profit, high-growth products. Tool steels, in particular, are to be expanded to leverage the company`s technological expertise, combined with high-value-added processing. In structural steels and stainless grades the plan is to terminate unprofitable contracts.
The program has highlighted major potential for improvements which will guarantee EWK strong earnings even in difficult economic times.
"The combination of streamlining internal processes, focusing on global customer structures and optimizing cost positions will secure not only our production sites in Germany but also our leading position in the global market for specialty steel long products. This will create the basis needed for sustainable growth of our business," said Dr. Olbrich.
The implementation of the restructuring program will involve around 350 job losses at the two plants in Witten and Krefeld. "The measures are to be realized in a socially compatible way. Talks with the works council on a reconciliation of interests/redundancy plan will begin shortly," said human resources director Paul Ring.
Edelstahl Witten-Krefeld achieved sales of 462 million euros in fiscal year 2001/2002 and currently employs around 2,300 people, including 1,617 in Witten and 694 in Krefeld.
ThyssenKrupp Steel AG
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