On 24 May 2002, Det Danske Stålvalseværk A/S (Dansteel) - Denmark's largest recycling company, whose activities include producing iron and steel from scrap - suspended payments after having accumulated a deficit of about DKK 0.5 billion over the past three years. The wages of the employees were guaranteed for a further period of one month and, according to employee representatives, the employees agreed to continue to work while the management looked for a buyer. On 28 June, however, the company filed a winding-up petition and about 1,100 employees received notice of dismissal.
In June 2002, the Danish scrap steel recycling company Dansteel submitted a winding-up petition, having accumulated major losses. The firm's 1,100 employees have been dismissed and it is expected that the whole Frederiksværk region will be affected by the closure. The government is seeking to mitigate the negative effects through an employment and training programme for the redundant workers.
On 24 May 2002, Det Danske Stålvalseværk A/S (Dansteel) - Denmark's largest recycling company, whose activities include producing iron and steel from scrap - suspended payments after having accumulated a deficit of about DKK 0.5 billion over the past three years. The wages of the employees were guaranteed for a further period of one month and, according to employee representatives, the employees agreed to continue to work while the management looked for a buyer. On 28 June, however, the company filed a winding-up petition and about 1,100 employees received notice of dismissal.
The causes of Dansteel's closure included the following:
a declining market over a number of years for the company's main product, steel plates. Its turnover has, in particular, been negatively influenced by a decline in the construction of ships at European shipyards. Sales to other groups of customers, such as the windmill industry, have not been able to compensate for this development;
surplus capacity in the European steel industry;
costs for environmental investments, which since 1990 have amounted to DKK 356 million, of which DKK 200 million was spent during the period 1994-2001;
'green taxes' (taxes on electricity, natural gas, sulphur and carbon dioxide, and surplus heating duty), which were introduced from 1 January 1996, cost the company about DKK 46 million up until 1 January 2002; and
under electricity reform introduced with effect from the end of 1997, all electricity consumers must buy a proportion of their electricity from prioritised production technologies, such as energy from windmills. According to the Dansteel management and board, this led to increased costs for the company of about DKK 100 million, compared with buying electricity on the free market. In 2001, the company's costs for electricity increased by about DKK 31 million in relation to 2000.
The Dansteel workers were employed on contractual terms which mean that most of them will be entitled to notice pay of six months' full wages. It is hoped that, if the trustees manage to find a buyer, many of the employees, though not all, may return to the company. The management is continuing its efforts to sell the company and is in contact with several anonymous prospective buyers. The government has, in cooperation with the regional public employment service, initiated a monitoring process which aims to find jobs for the dismissed employees or offer them further training opportunities, thus mitigating the consequences of the job losses in the Frederiksværk region in North Zealand, where it is estimated that about 2,000 persons will be affected by the closure of the steelworks.
Dansteel's largest shareholder is the family-owned group AP Møller and the second-largest is the Danish state, with about 30% of the share capital.
Eurofound recommends citing this publication in the following way.
Eurofound (2002), Dansteel closes with loss of 1,100 jobs, article.
