As a result of the realignment of thyssenkrupp's long-term strategy, the weighting of the steel business has changed. The thyssenkrupp Group in its present form emerged from the merger of the long-established steel producer Thyssen AG and the heavy industry giant Friedrich Krupp AG, which took place in 1999. Under the motto "engineering.tomorrow.together" thyssenkrupp today advertises its diverse engineering services on its homepage as an innovative technology group. In addition, in contrast to a year ago, the steel business is also mentioned again: With the slogan "Future for steel" the multinational group presents the realignment of this business area. thyssenkrupp today employs around 158,000 people worldwide and generates annual sales of 43 billion euros. Under the umbrella of the Group, headquartered in Essen and Duisburg, there are 461 subsidiaries and a large number of other shareholdings.
The thyssenkrupp business areas
With five different business areas, the structure of the Group reflects the long-term diversification strategy. These are:
Components Technology
Elevator Technology
Industrial Solutions
Materials Services
Steel
The Components Technology business area is engaged in the design and manufacture of high-performance components used above all in automobiles, mechanical engineering, wind turbines and construction machinery. The thyssenkrupp Elevator Technology division is regarded as an international leader in the field of passenger elevators. It produces escalators and moving walks, passenger and freight elevators, passenger boarding bridges as well as stair and platform elevators. Customers, in particular from the chemical, port facilities, coke plants, shipbuilding, aerospace and automotive sectors, benefit from the highly specialized engineering services offered by thyssenkrupp's Industrial Solutions business. The Materials Services division comprises the global trading in exness trader of raw materials and materials. Here thyssenkrupp offers a wide range of services, from product consulting to complete supply chain organization. The Steel business area embodies thyssenkrupp's former core competency, the production of exclusive carbon steel in the form of flat steel.
Steel - the last effort
In the unanimous view of analysts, the steel activities represent thyssenkrupp's major problem child. In the face of overwhelming Chinese competition flooding the international market with cheap steel, it seems hopeless to achieve sustainable profits in this area. The situation is further complicated by the isolationist trade policy of US President Donald Trump, who is imposing import tariffs on steel. One of the bitter (and decidedly costly) experiences the German steel specialist has had to make in this area was an attempt to produce steel at its own plant in Rio de Janeiro, Brazil, on much more favorable terms than in this country. It failed spectacularly. Completion of the corresponding plant took place in 2010 and involved a large overrun of the originally estimated construction costs. The write-downs required in this connection impacted the Group's earnings with amounts in the billions.
The ill-fated project finally came to an inglorious end at the beginning of 2017 with the sale of the South American steel mill to the Argentinean Ternium Group at a price which was a fraction of the original construction costs.
Against this background, the prospects for success of the joint venture agreed by thyssenkrupp and the Indian steel group Tata Steel in September 2017 do not appear too positive. The reorganization and realignment of the thyssenkrupp Group was associated with personnel turbulence at the highest level: After Heinrich Hiesinger resigned as CEO at the beginning of July 2018, Supervisory Board Chairman Ulrich Lehner succeeded him a few days later. As interim CEO Guido Kerkhoff is now in charge of the company's fortunes.
