The country's steel enterprises are facing financial problems

The Swiss steel industry is facing a serious crisis and significant financial problems. Swissinfo reports this with reference to an investigation by RTS public television.

Stahl Gerlafingen, which produces reinforcing steel and profiles, recently announced the closure of one of its two production lines in the canton of Solothurn, putting about a hundred jobs at risk.

The situation is exacerbated by rising energy prices. Another industry player, the Swiss Steel Group’s 10,000-employee Lucerne-based steel plant, is facing similar problems. The steelmaker is looking to inject €300 million in new financing.

According to the industry association Swissmem, this decline is caused by several factors. Jean-Philippe Kohl, deputy director of Swissmem, explains that unlike Switzerland, other countries supported their steel mills during the sharp rise in energy prices. In addition, the EU and the US are partially closing their steel markets, which makes it difficult for Swiss companies to supply. In the last two years, the problem in the industry has been exacerbated by the strong franc.

Despite recognizing the importance of the Swiss steel industry, the government does not consider it appropriate to provide financial support to the industry. The State Secretariat for Economic Affairs told RTS that such measures are expensive and do not ensure long-term competitiveness.

At the same time, in January this year, Swiss Steel Group denied reports that the steel plant was in a difficult financial situation and that the cantonal government of Lucerne and one of its main stakeholders were considering support. The company claimed that its financing was secured and reiterated its restructuring plans, which include the spin-off of assets that the group considers non-core.

As GMK Center reported earlier last fall, the European Commission approved the acquisition of six subsidiaries of German Schmolz+Bickenbach, which is part of Swiss Steel, by French Jacquet Metal Service. The sale agreement was signed in February 2023. It covers steel sales centers in the Czech Republic, Estonia, Hungary, Latvia, Poland and Slovakia.