CEO Gunnar Groebler of German steel group Salzgitter says the company wants to expand its business catering to the defense industry, reported Reuters on Friday.
“We’re broadly positioned with tempered sheet metals for the defence industry,” Groebler said. “Salzgitter also produces steel pipes used in the defence industry,” he added.
Germany’s second largest steel producer is currently building an in-house defence task force, which would help it to position itself in the segment, its CEO said.
During a press conference, Groebler revealed that the company is actively working to secure further licensing agreements with the German defense forces. Europe is under increasing pressure to ramp up its defense spending as tensions with Russia escalate and the U.S. threatens to reduce its support for NATO.
According to Market Screener, Salzgitter is tightening its cost-cutting course, given its negative figures. The company has revised its cost-saving goals, now aiming to save 500 million euros annually by 2028, up from the earlier target of 250 million euros per year, CEO Groebler informed the German Press Agency. “Staff cuts are not a priority,” he added.
Groebler has identified procurement, logistics, and sales as the primary areas for cost-saving measures, with significant potential seen in procurement. Additionally, the Group is reassessing its investment plans, prioritizing essential projects, and postponing non-critical expenditures to align with its financial goals. However, it will not be possible without job cuts.
“If they leverage efficiency benefits, then at the end of the day this will also have an impact on jobs,” admitted Groebler.
However, he also said that there will be no cuts in the expansion of green steel production. The ongoing transformation program will proceed as scheduled, with the production of low-CO2 steel set to begin within the next 18 months. “We are not changing that,” he added.