Salzgitter focuses on armaments and takes over HKM for green steel

New market Salzgitter Wants to Get out of the Red with Armaments

2026-03-25 Source: dpa 3 min Reading Time

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In order to get its feet back on dry ground, the Salzgitter Group is now also looking to the defence industry as a new customer.

Salzgitter intends to enter the armaments sector in a few months' time just as surely as this steel plate made of Secure 500 steel grade has passed the ballistic test - and is therefore also accepted by the Bundeswehr.(Source: Salzgitter) — Salzgitter intends to enter the armaments sector in a few months' time just as surely as this steel plate made of Secure 500 steel grade has passed the ballistic test - and is therefore also accepted by the Bundeswehr.
(Source: Salzgitter)

Armaments is currently a growth area that Salzgitter, as Group CEO Gunnar Groebler emphasises, definitely wants to occupy. Last but not least, he is also looking at the lucrative margins that such business offers. In terms of volume, this remains a niche market, but a very attractive one! Why is this being done? Nund, the defence sector will not be able to compensate for the current weakness of the automotive industry as the main customer for Salzgitter products to date, but it is still worth entering this market. Groebler expects to see the first successes as early as the second half of 2026, and within three years, the share of Group sales accounted for by defence is set to rise to a single-digit percentage, the company adds. Salzgitter achieved almost all of the Bundeswehr's approvals last year and is therefore now also able to supply the German military. The company also acquired Thyrolf & Uhle from Dessau, a specialist supplier of security steel. As Groebler notes, Salzgitter is thus well positioned for the defence market.

Salzgitter soon to take over HKM from Thyssenkrupp Steel

The planned takeover of Hüttenwerke Krupp Mannesmann (HKM) from Thyssenkrupp Steel, which will take effect on June 1, 2026, will also help. Thyssenkrupp Steel had announced its intention to withdraw from the joint venture or close it down. So far, Thyssenkrupp holds 50 percent and Salzgitter 30 percent. According to Groebler, the purchase should be finalised by the end of May. A restructuring report is still awaited, but this is in progress. Approval from the antitrust authorities is also still pending. The aim is to take over HKM completely by the summer. HKM is then to be radically restructured over the course of around three years.

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This includes replacing the two blast furnaces with green steel plants. Unfortunately, the workforce will also be reduced to around 1,000 people. According to Groebler, this may sound time-critical, but the main reason for this is the funding already approved for the switch to green steel, which requires a three-year period. In the long term, the future looks bright for HKM. This is because HKM also supplies preliminary products for the booming defence industry. In addition, following the restructuring, the portfolio is to be expanded and primary products that previously came from Russia are to be added to the range. This will strengthen the European domestic market and fill the gap left by the sanctions against Russia.

The targets were more than achieved last year

Last year, the steel group significantly reduced its losses despite a weak steel environment. In 2025, the bottom line was a loss of 69.8 million euros, compared to a loss of 347.9 million euros in the previous year, as the company announced. In 2024, the result was still characterised by high value adjustments, provisions and conversion costs. The efficiency program, which has been running since 2022 and has now been extended once again, should also help: Instead of the 500 million euro improvement in earnings most recently targeted by 2028, it is now expected to generate 575 million. The first 250 million euros have already been achieved by 2025. "We have clearly exceeded our target in 2025," comments Groebler. The target we set ourselves has been exceeded by a third.

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