ThyssenKrupp sets 2012 date for vast restructuring plan

13th May 2011, Comments 0 comments

ThyssenKrupp, Germany's biggest steel group, said Friday it would complete by late next year a restructuring plan which will reduce sales by a quarter and mean the departure of 35,000 workers.

The group initially reported the plan last week, saying it would involve the spin-off of its Stainless Global unit, which has annual sales of almost six billion euros ($8.5 billion) and employs 11,000 people.

Several of ThyssenKrupp's auto component units are also to be separated from the parent group, while two others will be merged to form a specialist chassis manufacturer.

"We hope that by the end of the next exercise, these projects will have been finalised," the company's new chairman Heinrich Hiesinger told a press conference, after the plans were approved by the group's supervisory board.

ThyssenKrupp's fiscal year runs from October 1 to September 30.

The project is part of an effort to cut surplus steel production capacity in Europe, Hiesinger explained.

To avoid possible competition problems, the plans might be put into effect in several stages, and ThyssenKrupp planned to retain a substantial holding in the stainless steel maker to begin with.

ThyssenKrupp wants to trim debt linked to the launch of problematic plants in Brazil and the United States, which climbed by four billion euros in a year to 6.5 billion at the end of March.

Funds freed up would be progressively invested in dynamic markets such as China, and open up "a new chapter of growth," the company's chairman said.

Earlier in the day, ThyssenKrupp reported a surprise 84 percent jump in its second-quarter pre-tax profit to 352 million euros.

The group, which also manufactures elevators and offers industrial installation services, posted a 21 percent gain in sales to 12.3 billion euros.

Shares in the group showed a solid gain of 3.15 percent to 33.76 euros in late Frankfurt trading, topping the DAX index on which they are listed and which was 0.36 percent lower overall.

© 2011 AFP

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