Steel Manufacturer ThyssenKrupp Considers Selling its U.S., Brazil Plants

'The economic parameters have changed significantly since the development of the strategy' for the factories.

German industrial giant ThyssenKrupp (IW 1000/62) said on Tuesday it was considering selling its steel plants in Brazil and the United States or bringing in partners.

The company, which earlier posted a heavy loss in the second quarter of its fiscal year, said "the economic parameters have changed significantly since the development of the strategy" for the factories.

It is examining "strategic options in all directions for both plants," it said, adding in a written statement that this could involve "a partnership or a sale."

Rising production costs in Brazil and tumbling sales prices in the United States have hit its 2007 strategy for slabs to be produced at low cost in Brazil and shipped and processed in the U.S. for sale in North America.

"In addition to the general business downturn due to the financial and economic crisis, the different rates of growth in the two regions are calling this strategy into question," it said.

"Whereas the U.S. economy is showing no major momentum, Brazil is enjoying strong growth," the company added.

The group, which operates its business year to end September, said earlier Tuesday it was 587 million euros (US$754 million) in the red amid weak demand for steel, a much worse result than the 36-million-euro loss analysts had expected.

As well write-downs at its Inoxum subsidiary, the losses were also due to costs related to the expensive new factories in Brazil and the United States.

Copyright Agence France-Presse, 2012

See Also:

ThyssenKrupp to Sell Stainless Steel Business to Outokumpu

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