MÖNCHENGLADBACH (dpa-AFX) - Plant manufacturer SMS plans to start construction of two large-scale plants for more climate-friendly steel production in Duisburg and northern Sweden in the fall. This was announced by the family-owned company on Wednesday in Monchengladbach.

Preparations for the construction of the first direct reduction plant are underway at thyssenkrupp Steel in Duisburg, explained CEO Jochen Burg in a statement. SMS will take over the construction site in the fall and start "with the challenging construction work in a confined space".

The plant will replace one of four blast furnaces at Germany's largest steel manufacturer. If it is operated with climate-neutral hydrogen, it should avoid more than 3.5 million tons of the greenhouse gas carbon dioxide. The order volume for SMS is 1.8 billion euros.

According to Burg, the planning and construction phases of the "H2 Green Steel" steel mill project in Sweden, which is to be operated 100% with green hydrogen, are largely complete. "The plant components are currently being manufactured and delivered to the construction site." From the fall, SMS will begin coordinating the construction work for the plant with its own teams on site. In Sweden, SMS is supplying further technical equipment in addition to a direct reduction plant. The order volume there is one billion euros.

More than 14,000 employees at SMS

SMS remains on course for growth. In 2023, turnover rose to 3.4 billion euros (2022: 3.1 billion euros). Order intake increased from 4.6 to more than 5 billion euros. SMS more than doubled its pre-tax profit to 42 million euros. CFO Fabíola Fernandez spoke of a "successful year". The company is expecting a further improvement in earnings in 2024.

Burg explained that the expansion of the service business had contributed significantly to the improved result. SMS announced its intention to increase the share of the service business to at least 50 percent by 2030.

Among other things, the SMS Group builds rolling mills and casting plants for the steel and aluminum industry. The company employs more than 14,000 people worldwide./tob/DP/mis