May 18, 2022

SSAB plans a new Nordic production system and to advance the green transition

SSAB’s Board of Directors has made the political decision to fundamentally transform Nordic belt production and accelerate the company’s green transition. This decision was taken against a backdrop of strong growth in demand for fossil-free steel. The plan is to replace the existing system with new mini-factory technology, which will result in a broader product program and a better cost position. The ambition is to largely eliminate carbon dioxide emissions by 2030, 15 years earlier than previously announced. However, to achieve this ambition, the necessary infrastructure, including access to fossil-free electricity, must be in place in time.

“Our customers demand fossil-free products from SSAB. We can resolve the technical challenges and we have a strong financial position. If we can resolve the issue of power supply and environmental permits with the company, then we can transition 15 years earlier than the previously communicated plan. We can fund the plan with our own cash flow, resulting in a broader product program and a better cost position,” says Martin LindqvistPresident and CEO of SSAB.

Reduction of carbon dioxide emissions by 8 million tons per year
SSAB is leading the green transition in the steel industry through the unique HYBRIT initiative, which SSAB is advancing with its partners, and the conversion of Oxelösund, which has already been planned. Today’s decision means a transformation of SSAB’s other Nordic production sites over the next ten years, much faster than the previous 2045 target. The first step will be to develop a more detailed transformation plan for each production site. The order of transformation of the sites will depend, among other things, on the availability of the necessary infrastructure, in particular access to competitive electricity. The plan means that all SSAB emissions will be largely eliminated by the start of the next decade, which will mean a reduction in emissions of more than 8 million tonnes of carbon dioxide per year, compared to current levels. The investment will reduce approximately 10% Sweden total carbon dioxide emissions and approximately 7% in Finland.

New crafting system
The intention is to transform SSAB’s Nordic production system based on the current business strategy. The new system will result in increased capacity for premium products, a better cost position and fossil-free production. Under the new plan, Luleå and Raahe will be transformed into profitable mini-factories, complete with electric arc furnaces and rolling mills. Borlänge and Hämeenlinna will continue to be developed in accordance with the new production processes.

Strategic investments in the new tape production system are expected to total approximately 45 billion Swedish crowns during the period 2022-2030. At the same time, it will eliminate the need to invest in existing systems with blast furnaces, steel mills and rolling mills.

Wider product program and better cost positioning
The investment will result in a wider offering of premium SSAB, Advanced High Strength Steel (AHSS) and Quenched & Tempered (Q&T) products. An expanded dimensional program with improved tolerances will expand the offering to the automotive industry, among others. The diet has several advantages:

  • An expanded product range in special steels and a better product mix with fossil-free products.
  • Cost savings through, among other things, more efficient production and significantly shorter delivery times.
  • The elimination of carbon dioxide emission costs, as blast furnaces are decommissioned.
  • Increased flexibility to respond to business fluctuations once the transformation is complete.

Cash flow financing
SSAB is in a strong financial position and the assessment is that the company can fund the strategic investment program from its own cash flow. Permit processes for Luleå and Raahe will start in 2022.

“We now have a unique opportunity in Sweden and Finland. Accelerated rapid industry transformation will enable us to create new fossil-free value chains and secure jobs in Nordic industry for the future. We will increase SSAB’s profits, while rapidly reducing carbon dioxide emissions and making a significant contribution to climate and societal transition,” says Martin Lindqvist.

For more information, please contact: Mia Widell, Group Communications Manager, [email protected], tel. + 46 76 527 2501
Per Hillström, Head of Investor Relations, [email protected], tel. + 46 70 295 2912

This information is inside information which SSAB AB (publ) is required to make public in accordance with the EU Market Abuse Regulation. The information has been submitted for publication, through the contact person listed above, to 7:15 a.m. CET to January 28, 2022.

SSAB is a Nordic and American steel company. SSAB offers value-added products and services developed in close collaboration with its customers to create a stronger, lighter and more sustainable world. SSAB has employees in over 50 countries. SSAB has production facilities in Sweden, Finland and the United States. SSAB is listed on Nasdaq Stockholm and has a secondary listing on Nasdaq Helsinki.
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(c) Decision 2022. All rights reserved., sources Press Releases – English