Success creates freedom

Up until a few years ago, no one gave the steel and technology company Salzgitter AG a realistic chance of survival. It was considered too small. But with a comprehensive new business strategy, the company has developed into a healthy and independent corporation that is moving with big steps toward ambitious new goals. "We aim to achieve a significant role on the European market in several product areas", says Wolfgang Leese, chairman of the board at Salzgitter AG. "And actually only a leading role interests us."

Wolfgang Leese has managed not only to implement new structural improvements in the past two years, but the increasing success of the corporation has proven that his strategy was the right one. The fiscal year 2001 was the best in the last 11 years - a remarkable success considering the general downward economic trend at present. And to top it all off, as of the Fall of last year, Salzgitter AG is noted in the German MDAX. "This admission to the top 100 companies on the German stock market reflects the recognition that we have achieved on the capital market in Germany", says Salzgitter's financial executive Dr. Fuhrmann. "This opens many doors that were previously closed for us - for example to the index - oriented investors."

According to Dr. Fuhrmann, the fact that such a traditional industry is able to rejuvenate and experience such positive growth is evidence that quality and facts pay off in the end. He feels that our times tend to exaggerate - not only the rocket-like ascent of the new market technologies, but also the abrupt descent of the general economy are inexplicable. "Over a certain period of time, trading on the stock market was misunderstood to mean a free-for-all. Hopefully the investors have learned in the meantime that the laws of economics have not been rewritten and that revenues, profitability and sound business practices are the important criteria when investing."

The corporation is selective in the area of acquisitions. Growth is important, but Salzgitter's policy of amortisation over a period of one year instead of the usual five to ten years has been a successful strategy, which has found recognition on the stock market. The stock's development is 40 % better than the branch index!

At the bottom of the corporation's success is its concentration on the basic commodity steel, the production, processing and trade in steel and steel products. An age old industry, there is little room for the development of new methods in steel production. But there is room for improvements in galvanizing and surface refining techniques which are in demand from the automobile industry among others. Improved processing and new plants are meant to improve the quality of the products to keep up with the customers‚ demands. The goal is a turnover of a total of 10 billion Euro spread over several sound product areas with a ROCE (return on capital employed) of at least 12 %.

This kind of growth requires a well-organized corporate structure. For this reason, the company was divided into a small, but efficient management holding and five business areas. Each area enjoys a large degree of financial and executive freedom and should manage their affairs as independently as possible. "This way we are more flexible, closer to the customer and able to react to the market demands more quickly", explains Wolfgang Leese.

If Wolfgang Leese continues to invest so much creative energy and enthusiasm in the corporation and its employees, then there is no question that he will achieve his goal to make Salzgitter AG one of the world's leading steel corporations.