Outokumpu, a stainless steel industry leader, has concluded a historic partnership, acquiring a 10% stake in CRONIMET North-East GmbH. The collaboration aims to fortify scrap sourcing in Northeastern Europe, fostering circularity and reducing carbon footprints. Both companies share a commitment to Sustainable Development Goals and Science-Based Targets initiative, focusing on CO₂ reduction and joint innovation. Outokumpu's strategic move aligns with circular economy ambitions, emphasizing quality recycled steel close to production sites.
In a significant stride towards advancing circularity and sustainability, Outokumpu, a frontrunner in the stainless steel industry, has sealed a strategic partnership by acquiring a 10% minority interest in CRONIMET North-East GmbH.
The collaboration, unveiled on November 7, 2023, signifies an expansion of the longstanding partnership between Outokumpu and CRONIMET. The focus is on securing a robust supply chain for high-quality scrap within Northeastern Europe, aligning with shared ambitions for regional development and circular economy practices.
Outokumpu's acquisition of the minority stake in CRONIMET North-East GmbH is a testament to the company's commitment to environmental goals. The move follows the fulfillment of customary closing conditions and regulatory approvals, marking a pivotal moment in the stainless steel industry's pursuit of sustainability.
Marc-Simon Schaar, Chief Procurement Officer at Outokumpu, expresses enthusiasm about the extended collaboration with CRONIMET. The shared vision revolves around accelerating the circular economy in Northeastern Europe by sourcing recycled steel in close proximity to where it's needed. This strategic approach not only ensures the best possible quality of recycled steel but also contributes to reducing the carbon footprint in production—a critical aspect of Outokumpu's ambitious climate targets.
Jürgen Pilarsky, CEO of CRONIMET, sees the collaboration as a learning opportunity and a means to drive CO₂ reduction ambitions. Both companies are committed to the Science-Based Targets initiative, aligning their efforts with the 17th UN goal that advocates for partnerships to achieve Sustainable Development Goals.
Beyond scrap sourcing, the partnership extends to joint innovation and research. The goal is to enhance technologies that further reduce CO₂ emissions, increase predictability to lower costs, and drive waste reduction within the supply chain. Improved scrap quality resulting from these initiatives will enhance process efficiency for both Outokumpu and CRONIMET.
While Outokumpu assumes a strategic role as a shareholder in CRONIMET's Northeastern business, operational control remains with CRONIMET. Outokumpu's approach emphasizes collaboration and partnerships rather than vertical integration into the supply chain of stainless steel scrap.
The transaction, executed as a share purchase, will see Outokumpu applying the equity accounting method in its financial reporting from the first quarter of 2024.
Outokumpu's alliance with CRONIMET signifies not only a strategic investment but a shared commitment to advancing sustainability in the stainless steel industry. This partnership underscores the importance of collaborative efforts in achieving circular economy goals and reducing environmental impact.