Arbed
Encyclopedia
ARBED was a major Luxembourg
-based steel
and iron
producing company. Created in 1911 after the merger of three steel producing companies, ARBED was a major actor in the economic history of the Grand-Duchy until it merged in 2002 with two other European steel companies to create Arcelor
.
in 1876 led to the development of an important national steel industry
, especially in the south of the country, and provided Luxembourg with sustained economic growth during the second half of the 19th century. This economic growth
was greatly boosted during the two decades preceding World War I when large integrated steelworks, able to convert cast iron into steel and rolled steel, were constructed. Steel production surged from 145 313 tonnes in 1900 to 1 115 004 tonnes in 1913, and steel-making accounted for around 60 % of total industrial employment before World War I. The close economic relationship between Luxembourg and its neighbours, especially Germany
, enabled investors to develop cross-border projects. As early as 1856, Luxembourg industrialists and members of parliament
founded the Saarbrücker Eisenhüttengesellschaft - Société en participation des Forges de Sarrebruck ("Saarbrücken
shareholding company"). Similarly, German industrialists invested funds in the development of Luxembourg steel companies.
South Luxembourg's important economic development due to steel production led to the creation of several steel-producing companies. In 1882, the Société Anonyme des Hauts Fourneaux et Forges de Dudelange
("High Furnace and Forging Mills of Dudelange Shareholding Company") was founded by the Société en commandite des Forges d'Eich
, Le Gallais, Metz
et Cie, founded in 1838, and the main shareholders of the Saarbrücken shareholding company.
As steel production increased exponentially, it soon became necessary to merge companies. In 1911, at an extraordinary general corporate meeting of the Société anonyme des Hauts Fourneaux et Forges de Dudelange, decision was taken to incorporate the Société anonyme des Mines du Luxembourg et Forges de Sarrebruck and the Société en commandite des Forges d'Eich, Le Gallais, Metz et Cie. into the Dudelange company. The new shareholding company, merging the three largest local steel companies, was named ARBED S.A., the acronym for Aciéries Réunies de Burbach
-Eich-Dudelange
, Société Anonyme.
At its founding, ARBED operated 21 blast furnace
s, 3 electric furnaces, 2 steelmaking plants and several rolling mills. In 1912, raw steel production from the ARBED works reached 824 500 tonnes. Although steel production almost halted during World War I, the following decades prove to be very successful. In order to further develop, ARBED took an international dimension and acquired and absorbed several companies in Belgium and Germany in the 1920s.
At the end of World War I, German capital was withdrawn, and steelworks were taken over by groups with Franco
-Belgian
-Luxembourg capital. Two companies, Société Metallurgique des Terres Rouges and Société Minière des Terres Rouges, were specifically created by ARBED and other French and Belgian companies for the purpose of acquiring plants and mines west of the Rhine which had to be sold by Germany as a consequence of the Treaty of Versailles
.
ARBED, already a major regional steel producer, further developed its international reach by establishing with the Société Metallurgique des Terres Rouges company a joint sales company called COLUMETA in 1920, and a joint shipping
company called TRANSAF in 1922. In order to develop its international reach, an ARBED offshoot called Compania Siderúrgica Belgo Mineira was established in Brazil
in 1921. As ARBED's growth continued, ARBED and Société Metallurgique des Terres Rouges finally merged in 1937.
World War II severely affected steel production, and many steel mills were either destroyed or heavily damaged. Luxembourg had been officially absorbed into Germany, and ARBED was temporarily renamed Hüttenwerke Burbach-Eich-Dudelingen (Burbach-Eich-Dudelange Metallurgical Plants).
("The Thirty Glorious"), national raw steel production rose from 2.45 million tonnes in 1950 to 6.45 million tonnes in 1974, and Luxembourg reached an exceptional annual growth rate of 6.7 % between 1946 and 1951, then a good average of 3.9% until 1975. During the first half of the 1970s, the steel industry represented close to 30 % of the total sum of added value in the national Luxembourg economy, and more than half the total added value of industry. By 1974, Luxembourg steelworks and iron mines provided work for around 25 000 employees in 1974 (16% of the total national).
During these three decades, ARBED not only developed its local plants but also increased the diversification of its activities. In 1962, ARBED became a partner in the creation of the maritime SIDMAR complex in Belgium, and later obtained a majority stake in the new company. In 1974, ARBED created TrefilARBED, as part of the extension of wire drawing activities, and Samarco, created through the mining company Samitri to develop iron ore resources in Brazil. A powerful regional the European economic actor, ARBED gradually became a global actor through the magnitude of its operations.
and its global repercussions had a dramatic impact on Luxembourg and on ARBED in particular, as it coincided with worldwide global steel overproduction. Despite ARBED's international sales network's restructuring in 1976 (Columeta was renamed TradeARBED) and the establishment of TrefilARBED Korea in 1978, by 1983, steel production had slumped back to 1955 levels (3.2 million tonnes, compared with 6.45 million tonnes in 1974). By 1985, the steel industry employed only half of its 1974-level work force.
In 1978 ARBED becomes a 25% shareholder in Métallurgique et Minière de Rodange-Athus (MMRA), mining and hot steel production is shut down and in 1994 MMRA merges with ARBED-Esch Schifflange to from Aciéries Rodange Esch-Schifflange (ARES) a subsidiary of ProfilARBED
Form 1982 to 1983, the Luxembourg steel industry was restructured and the Luxembourg government invested heavily in ARBED, finally owning 42.9% of the company's shares. Furthermore, during the following two decades, ARBED developed its international activities as well as its production of long steel products (steel bars and rods produced for a variety of uses such as building and bridge construction) and electric arc furnace
steel while reducing its domestic steel-producing operations.
Certain key events in the economic expansion of ARBED occurred in the 1990s. In 1990, ARBED jointly acquired Yates, a U.S. company specialising in the production of copper
foil
, with Japan
ese group Furukawa Electric. The following year, the Luxembourg company founded TrefilARBED Arkansas (USA), a steelcord plant in Pine Bluff, Arkansas
. In 1992, it founded long steel products company Stahlwerk Thüringen in Germany. In 1993, ARBED founded ProfilARBED, a subsidiary company specialized in the production of long steel products and ARBED Americas, a subsidiary of TradeARBED, in 1994, to manage all United States commercial activities. ARBED also expanded by taking over other companies; in 1995, it obtained the majority of shares of German Klöckner Stahl, now STAHLwerke BREMEN, and, in 1997, it developed a strategic partnership with Spanish steel company Aceralia
(formerly CSI). However, during this period of geographic expansion and division of sectors, the remaining Luxembourg blast furnaces gradually stopped operating, the last one, in Belval
, definitely halting its operations in 1997.
and French Usinor
, merged into Arcelor
, a steel industry giant with a 96 000-strong workforce spread throughout 60 different countries.
In 2006, Indian steel giant and ARBED-rival Mittal Steel launched a takeover
for Arcelor that led to the creation of ArcelorMittal, the world's largest steel company.
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
-based steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
and iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
producing company. Created in 1911 after the merger of three steel producing companies, ARBED was a major actor in the economic history of the Grand-Duchy until it merged in 2002 with two other European steel companies to create Arcelor
Arcelor
Arcelor S.A. was the world's largest steel producer in terms of turnover and the second largest in terms of steel output, with a turnover of €30.2 billion and shipments of 45 million metric tons of steel in 2004...
.
Origins (1882-1911)
The discovery of iron ore in Luxembourg in the 1850s and the introduction of metallurgyMetallurgy
Metallurgy is a domain of materials science that studies the physical and chemical behavior of metallic elements, their intermetallic compounds, and their mixtures, which are called alloys. It is also the technology of metals: the way in which science is applied to their practical use...
in 1876 led to the development of an important national steel industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
, especially in the south of the country, and provided Luxembourg with sustained economic growth during the second half of the 19th century. This economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
was greatly boosted during the two decades preceding World War I when large integrated steelworks, able to convert cast iron into steel and rolled steel, were constructed. Steel production surged from 145 313 tonnes in 1900 to 1 115 004 tonnes in 1913, and steel-making accounted for around 60 % of total industrial employment before World War I. The close economic relationship between Luxembourg and its neighbours, especially Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, enabled investors to develop cross-border projects. As early as 1856, Luxembourg industrialists and members of parliament
Parliament
A parliament is a legislature, especially in those countries whose system of government is based on the Westminster system modeled after that of the United Kingdom. The name is derived from the French , the action of parler : a parlement is a discussion. The term came to mean a meeting at which...
founded the Saarbrücker Eisenhüttengesellschaft - Société en participation des Forges de Sarrebruck ("Saarbrücken
Saarbrücken
Saarbrücken is the capital of the state of Saarland in Germany. The city is situated at the heart of a metropolitan area that borders on the west on Dillingen and to the north-east on Neunkirchen, where most of the people of the Saarland live....
shareholding company"). Similarly, German industrialists invested funds in the development of Luxembourg steel companies.
South Luxembourg's important economic development due to steel production led to the creation of several steel-producing companies. In 1882, the Société Anonyme des Hauts Fourneaux et Forges de Dudelange
Dudelange
Dudelange is a commune with city status in southern Luxembourg. It is the fourth-most populous commune, with over 18,300 inhabitants. Dudelange is situated close to the border to France....
("High Furnace and Forging Mills of Dudelange Shareholding Company") was founded by the Société en commandite des Forges d'Eich
Eich
Eich may refer to:* Eich, Rhineland-Palatinate, Germany* Eich, Switzerland* Eich, Luxembourg* Eich, Moselle, a village in the French département of MoselleEich is the surname of:* Brendan Eich, a computer programmer...
, Le Gallais, Metz
Metz
Metz is a city in the northeast of France located at the confluence of the Moselle and the Seille rivers.Metz is the capital of the Lorraine region and prefecture of the Moselle department. Located near the tripoint along the junction of France, Germany, and Luxembourg, Metz forms a central place...
et Cie, founded in 1838, and the main shareholders of the Saarbrücken shareholding company.
As steel production increased exponentially, it soon became necessary to merge companies. In 1911, at an extraordinary general corporate meeting of the Société anonyme des Hauts Fourneaux et Forges de Dudelange, decision was taken to incorporate the Société anonyme des Mines du Luxembourg et Forges de Sarrebruck and the Société en commandite des Forges d'Eich, Le Gallais, Metz et Cie. into the Dudelange company. The new shareholding company, merging the three largest local steel companies, was named ARBED S.A., the acronym for Aciéries Réunies de Burbach
Malstatt-Burbach
Malstatt-Burbach joined the former Saarbrücken and Sankt Johann to form the present city of Saarbrücken in 1909....
-Eich-Dudelange
Dudelange
Dudelange is a commune with city status in southern Luxembourg. It is the fourth-most populous commune, with over 18,300 inhabitants. Dudelange is situated close to the border to France....
, Société Anonyme.
Growth and Development of ARBED (1911-1945)
Blast furnace
A blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally iron.In a blast furnace, fuel and ore and flux are continuously supplied through the top of the furnace, while air is blown into the bottom of the chamber, so that the chemical reactions...
s, 3 electric furnaces, 2 steelmaking plants and several rolling mills. In 1912, raw steel production from the ARBED works reached 824 500 tonnes. Although steel production almost halted during World War I, the following decades prove to be very successful. In order to further develop, ARBED took an international dimension and acquired and absorbed several companies in Belgium and Germany in the 1920s.
At the end of World War I, German capital was withdrawn, and steelworks were taken over by groups with Franco
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
-Belgian
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
-Luxembourg capital. Two companies, Société Metallurgique des Terres Rouges and Société Minière des Terres Rouges, were specifically created by ARBED and other French and Belgian companies for the purpose of acquiring plants and mines west of the Rhine which had to be sold by Germany as a consequence of the Treaty of Versailles
Treaty of Versailles
The Treaty of Versailles was one of the peace treaties at the end of World War I. It ended the state of war between Germany and the Allied Powers. It was signed on 28 June 1919, exactly five years after the assassination of Archduke Franz Ferdinand. The other Central Powers on the German side of...
.
ARBED, already a major regional steel producer, further developed its international reach by establishing with the Société Metallurgique des Terres Rouges company a joint sales company called COLUMETA in 1920, and a joint shipping
Shipping
Shipping has multiple meanings. It can be a physical process of transporting commodities and merchandise goods and cargo, by land, air, and sea. It also can describe the movement of objects by ship.Land or "ground" shipping can be by train or by truck...
company called TRANSAF in 1922. In order to develop its international reach, an ARBED offshoot called Compania Siderúrgica Belgo Mineira was established in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
in 1921. As ARBED's growth continued, ARBED and Société Metallurgique des Terres Rouges finally merged in 1937.
World War II severely affected steel production, and many steel mills were either destroyed or heavily damaged. Luxembourg had been officially absorbed into Germany, and ARBED was temporarily renamed Hüttenwerke Burbach-Eich-Dudelingen (Burbach-Eich-Dudelange Metallurgical Plants).
"Les Trente Glorieuses" (1946-1974)
During the three decades following the end of World War II, ARBED played a key role in the development of the Luxembourg economy. During this period, called Les Trente GlorieusesTrente Glorieuses
Les Trente Glorieuses refers to the thirty years from 1945-1975 following the end of the Second World War in France. The name was first used by the French demographer Jean Fourastié...
("The Thirty Glorious"), national raw steel production rose from 2.45 million tonnes in 1950 to 6.45 million tonnes in 1974, and Luxembourg reached an exceptional annual growth rate of 6.7 % between 1946 and 1951, then a good average of 3.9% until 1975. During the first half of the 1970s, the steel industry represented close to 30 % of the total sum of added value in the national Luxembourg economy, and more than half the total added value of industry. By 1974, Luxembourg steelworks and iron mines provided work for around 25 000 employees in 1974 (16% of the total national).
During these three decades, ARBED not only developed its local plants but also increased the diversification of its activities. In 1962, ARBED became a partner in the creation of the maritime SIDMAR complex in Belgium, and later obtained a majority stake in the new company. In 1974, ARBED created TrefilARBED, as part of the extension of wire drawing activities, and Samarco, created through the mining company Samitri to develop iron ore resources in Brazil. A powerful regional the European economic actor, ARBED gradually became a global actor through the magnitude of its operations.
World Economic Crisis and Restructuring (1975-2002)
The 1973 oil crisis1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
and its global repercussions had a dramatic impact on Luxembourg and on ARBED in particular, as it coincided with worldwide global steel overproduction. Despite ARBED's international sales network's restructuring in 1976 (Columeta was renamed TradeARBED) and the establishment of TrefilARBED Korea in 1978, by 1983, steel production had slumped back to 1955 levels (3.2 million tonnes, compared with 6.45 million tonnes in 1974). By 1985, the steel industry employed only half of its 1974-level work force.
In 1978 ARBED becomes a 25% shareholder in Métallurgique et Minière de Rodange-Athus (MMRA), mining and hot steel production is shut down and in 1994 MMRA merges with ARBED-Esch Schifflange to from Aciéries Rodange Esch-Schifflange (ARES) a subsidiary of ProfilARBED
Form 1982 to 1983, the Luxembourg steel industry was restructured and the Luxembourg government invested heavily in ARBED, finally owning 42.9% of the company's shares. Furthermore, during the following two decades, ARBED developed its international activities as well as its production of long steel products (steel bars and rods produced for a variety of uses such as building and bridge construction) and electric arc furnace
Electric arc furnace
An electric arc furnace is a furnace that heats charged material by means of an electric arc.Arc furnaces range in size from small units of approximately one ton capacity up to about 400 ton units used for secondary steelmaking...
steel while reducing its domestic steel-producing operations.
Certain key events in the economic expansion of ARBED occurred in the 1990s. In 1990, ARBED jointly acquired Yates, a U.S. company specialising in the production of copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
foil
Foil (chemistry)
A foil is a very thin sheet of metal, usually made by hammering or rolling a piece of metal. Foils are most easily made with malleable metals, such as aluminium, copper, tin, and gold. Foils usually bend under their own weight and can be torn easily. The more malleable a metal, the thinner foil can...
, with Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese group Furukawa Electric. The following year, the Luxembourg company founded TrefilARBED Arkansas (USA), a steelcord plant in Pine Bluff, Arkansas
Pine Bluff, Arkansas
Pine Bluff is the largest city and county seat of Jefferson County, Arkansas, United States. It is also the principal city of the Pine Bluff Metropolitan Statistical Area and part of the Little Rock-North Little Rock-Pine Bluff, Arkansas Combined Statistical Area...
. In 1992, it founded long steel products company Stahlwerk Thüringen in Germany. In 1993, ARBED founded ProfilARBED, a subsidiary company specialized in the production of long steel products and ARBED Americas, a subsidiary of TradeARBED, in 1994, to manage all United States commercial activities. ARBED also expanded by taking over other companies; in 1995, it obtained the majority of shares of German Klöckner Stahl, now STAHLwerke BREMEN, and, in 1997, it developed a strategic partnership with Spanish steel company Aceralia
Aceralia
Aceralia was a large Spanish steel producer formed in 1997 by restructuring of a group formed from earlier mergers of the steel producers ENSIDESA and Altos Hornos de Vizcaya....
(formerly CSI). However, during this period of geographic expansion and division of sectors, the remaining Luxembourg blast furnaces gradually stopped operating, the last one, in Belval
Belval, Luxembourg
Belval is a quarter and neighbourhood in the west of Esch-sur-Alzette, in south-western Luxembourg. Belval is the site of the large steelworks that dominate the city. Due to the dominance of the steelworks, Belval has suffered from the abandonment of steel production in Luxembourg, and is...
, definitely halting its operations in 1997.
Arcelor and ArcelorMittal (2002 onwards)
Despite the end of its Luxembourg steel production, ARBED remained a global economic actor. Its diversification and development of its international scope enabled ARBED to remain competitive. In 2002, ARBED and two other European steel-producing and manufacturing companies, Spanish strategic partner AceraliaAceralia
Aceralia was a large Spanish steel producer formed in 1997 by restructuring of a group formed from earlier mergers of the steel producers ENSIDESA and Altos Hornos de Vizcaya....
and French Usinor
Usinor
Usinor was a French steel making group formed in 1948. The group was merged with Sacilor in 1986, becoming Usinor-Sacilor and was privatised in 1995, and renamed Usinor in 1997....
, merged into Arcelor
Arcelor
Arcelor S.A. was the world's largest steel producer in terms of turnover and the second largest in terms of steel output, with a turnover of €30.2 billion and shipments of 45 million metric tons of steel in 2004...
, a steel industry giant with a 96 000-strong workforce spread throughout 60 different countries.
In 2006, Indian steel giant and ARBED-rival Mittal Steel launched a takeover
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
for Arcelor that led to the creation of ArcelorMittal, the world's largest steel company.
External links
- ARBED (Archive)