Voestalpine to close Camtec plant in Linz due to increasing costs

This step will be completed by the end of the 2025/2026 financial year and is seen as part of the company's strategic plans. The company states that the production process is no longer sustainable due to increasing energy and labor costs, as well as pressure from competition, especially from Asia. In particular, the low cost advantages of countries such as China and India are reportedly making it difficult for Voestalpine to compete in these markets.

Another important reason for this development is reportedly the contraction in demand in Europe's automotive and engineering sectors. These two sectors are reportedly the main buyers of the products produced at the Camtec plant. However, decreasing demand is putting the plant in an economically difficult situation. In the fiscal year 2023/2024, the company's revenue from the Camtec plant was only EUR 12 million.

Although Voestalpine's press release states that the plant in Linz was the market leader in German-speaking countries, the production no longer has an economic value. The closure is therefore in line with the company's long-term sustainability goals.

With the closure of the plant, 53 employees risked losing their jobs. However, Voestalpine promises to offer them employment in other divisions in Linz and support for career transitions.

In terms of financial results, Voestalpine's revenues decreased by 8.5% in the financial year 2023/2024 compared to the previous year to EUR 16.68 billion. The company's EBITDA decreased by 34.5% to EUR 1.67 billion. The company does not expect a major improvement in market conditions in the 2024/2025 financial year and expects EBITDA to remain in the range of EUR 1.7-1.8 billion.

All in all, Voestalpine's move once again highlights the challenges for the European steel industry to cope with Asia-centered competition and the pressure from increasing costs. In particular, the increase in energy and labor costs and the recession in Europe's strategic sectors are causing companies to reconsider their long-term sustainability strategies.