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One of the largest industrial groups in Belgium, the Cockerill Sambre Group is a medium-sized integrated steelmaking concern. The group has three core activities: integrated steel manufacturing, particularly coated steel sheets; steel distribution, operating primarily in France and the Netherlands in addition to Belgium; and manufacturing of steel-based products for the construction industry. The group is also involved in several noncore areas, with these activities stemming from the historical development of the group and from a program of diversification embarked upon in the early 1990s. These include mechanical engineering and various services operations.
Cockerill Sambre entered 1998 as a majority state-owned company, 79 percent-owned by the regional government of Wallonia (the French-speaking southern half of Belgium)--the remainder was publicly traded. In October 1998 French steelmaking giant Usinor S.A. reached an agreement with the government to acquire a 75 percent stake in Cockerill Sambre, with the government retaining 25 percent.
The Cockerill Sambre Group of the late 20th century resulted from the 1981 merger of the two major iron and steel groupings of the Walloon region of Belgium. From its beginnings, the Cockerill Group had been based at Seraing on the River Meuse a few miles upstream from Liège, while the company Hainaut-Sambre was based at the town of Charleroi, some 65 miles east of Liège on the banks of the River Sambre. The Sambre flows into the Meuse and provides a geographical link between these two regions, formerly rich in coal. In both areas, iron and steel production dates back before the 18th century, based on the coal mines of the areas, but the majority of the companies that have been absorbed gradually into the group were originally founded between 1800 and 1838.
Liège Region Roots
The key figure of the Liège region was an Englishman, John Cockerill, whose name the group still bears to this day. His father, William, was an English engineer who had emigrated and established a successful textile machinery manufacturing firm at Verviers, 15 miles from Liège. In 1814 John Cockerill acquired from King William of Orange the old chateau at Seraing, formerly the summer residence of the prince-bishops of Liège. This has remained the registered office of Cockerill Sambre, and still houses the mechanical engineering division. The new factory opened in 1817, at first producing steam engines for spinning mills and winding and pumping engines for collieries. As coal was available on site, the company decided to produce the metal it required as well. The company was the first in Europe to erect a coke-fired blast furnace, which began production in 1826. By 1847 there were six blast furnaces in use. The state of Belgium was not created until 1830, following a revolutionary episode which necessitated the closure of the works at Seraing for a time. When production resumed, the company produced some of the first locomotives for the Belgian State Railways.
When John Cockerill died in 1840, the financial crisis that followed resulted in the winding up of the company. But it was soon reconstituted as a limited company in 1842, and production began to revive in earnest the following year. By 1845 good progress was being made, and Cockerill engines obtained a Grand Medal at the 1851 Great Exhibition in London. All kinds of heavy machinery were produced during this period: ships, including ironclad gunboats for Russia and cross-channel mailboats for the Dover-Ostend route; tunnelling machines; bridges; and various plants for steel works. In 1866 a new director-general, Eugene Sadoine, initiated the development of adjacent coal mines at Colard, and acquired two-fifths of the neighboring Esperance coal mines as well as iron mines in Spain. A new steel works was opened in 1883, accompanied by much modernization of the existing works. The social requirements of the workers were not neglected, there being workmen's houses, refectories, schools for both adults and children, a 250-bed hospital, a dispensary, and an orphanage with more than 100 places. During the International Exhibition held in Liège in 1905, the (British) Institution of Mechanical Engineers held its annual convention in the town, during which various visits were arranged for the members, including one to the Cockerill works. They were to see "large gas engines, steam turbines, blast-furnaces, steel works, collieries, etc." The party of British engineers also visited the Société d'Ougrée-Marihaye, to see another steel works which exactly 50 years later, in 1955, was to become part of the Cockerill company. The origins of the company Ougrée-Marihaye, which was established in 1835, lie in an iron foundry established at the beginning of the 19th century in the commune of Ougrée, between Seraing and the town of Liège itself, and the coal mines of Marihaye which had existed since 1778. This company occupied an important place in the Belgian iron and steel industry right up until the 1955 merger.
The other key company from the Liège area was Esperance-Longdoz. Its origins can be traced back to the Dothée family, which was already trading in ironmongery, copper ware, zinc objects and utensils, sheet metal, and hardware during the early 18th century. Esperance-Longdoz was formed in 1836, based on coal mines at Esperance, near Seraing, and with the involvement of John Cockerill. The first blast furnace opened there in 1838, followed in 1846 by a tin-plate works in the Longdoz district of Liège. The company was involved in joint ventures with Cockerill to exploit mineral rights, and became a major coke producer of this period. Esperance-Longdoz proved to be one of the most dynamic companies in the history of the group, surviving as a separate entity for 135 years until one of the penultimate mergers in 1970; as late as 1963 a brand new steelworks was built by Esperance-Longdoz on a greenfield site at Chertal, to the north of Liège.
Charleroi Region Roots
The 18th-century companies of the Liège region are only half of the story, and it is necessary to follow the rivers Meuse and Sambre upstream to Charleroi and examine the group's industrial antecedents. Most of the local companies there remained part of the Hainaut-Sambre side of the group until the formation of Cockerill Sambre in 1981, with the interesting exception of the Forges de la Providence. This company was founded in 1838 with the help of another Englishman, Thomas Bonehill, who had also been introducing industrial innovations to the Europeans. His successor, Alphonse Halbou, rose to fame by patenting the rolled I-section girder--often known today as the RSJ--in 1849, which accelerated the construction of high-rise buildings, undertaken first in Paris and eventually throughout Europe. Forges de la Providence remained separate until 1966, when it was merged with Cockerill-Ougrée in Liège, forming Cockerill-Ougrée-Providence. At this time, Forges de la Providence was a major steel producer based at Marchienne-au-Pont in Charleroi, but also owned two factories in France along with six other important French subsidiaries. By a twist of fate, rationalizations during the late 1970s led to the disposal of the Providence works to the Charleroi-based Thy-Marcinelle et Monceau (TMM) group. This could be said to have restored the geographic balance, but too late, as TMM itself--which first became Thy-Marcinelle et Providence--was to become part of Hainaut-Sambre in 1980, and so by 1981 found itself back with its old parent Cockerill, following the final merger which created Cockerill Sambre. As for the other Charleroi companies, TMM had been formed in 1966 from the merger of Thy-Marcinelle and Acieries et Miniéres de la Sambre. The origins of TMM include the forge of Thy-le-Chateau, which had existed as early as 1763, and Marcinelle, on the south bank at Charleroi. During the 17th and 18th centuries the whole region between the Sambre and the Meuse was known for its ironmasters, and it was one of these, Ferdinand Puissant, who had enlisted the services of Thomas Bonehill at Forges de la Providence. A Frenchman, Albert Goffart, had established his blast furnace in the nearby town of Monceau-sur-Sambre in 1836.
The other main grouping of firms in the surrounding area became the Hainaut-Sambre company in 1955, Hainaut being the name of the province in which Charleroi is situated. The two companies involved in the first merger were the Usines Métallurgiques de Hainaut, founded in 1829, and Sambre-et-Moselle, founded in 1835. The merger between Hainaut-Sambre and Thy-Marcinelle et Providence took place in 1979, not long after the transfer of Providence to TMM by Cockerill.
Mergers, 1955-81, Created Cockerill Sambre
A chronological perspective provides a clearer overview of the complexities of all these mergers and regroupings. Beginning with the rise of the 19th-century companies, there were, to start with, four principal companies in each of the two regions of Liège and Charleroi. The first significant mergers did not take place until 1955, following reorganization plans initiated after the formation of the European Commission for Coal and Steel in 1952. These resulted in the formation of Hainaut-Sambre in the Charleroi region, and Cockerill-Ougrée at Liège. Another ten years passed before the mid-1960s witnessed two further rationalizations: the incorporation of Providence to form Cockerill-Ougrée-Providence at Liège, and the coming together of some of the earliest Charleroi-based companies to form Thy-Marcinelle et Monceau.
During this period the other important Liège steelmaker, Esperance-Longdoz, had constructed a modern steel complex at Chertal to the north of the town, opened in 1963 to replace its works on sites nearer the town. These had become surrounded by other developments and were consequently suffering from a shortage of space in which to expand and introduce the wider strip mills which had become necessary in order to remain competitive in the market. At the end of the 1960s, a government committee formed to study the problems of the Belgian metallurgical industries decided that further concentration was necessary in this region in order to maintain the competitiveness of the industry nationally, reduce overproduction, improve efficiency, and target investment and subsidies. Problems were also due to the rise in the price of oil at this time, as the industry had become increasingly reliant on this form of energy following the decline in coal production. The two companies therefore decided to effect a complete merger, following a one-year period of joint management beginning in July 1979. This led to the formation in June 1970 of Cockerill-Ougrée-Providence et Esperance-Longdoz. It was logical at that time for the new group to dispose of the Providence works--which were in Charleroi, not Liège&mdashø the TMM company at Charleroi. For the next ten years, the company was known simply as Cockerill, appearing to renew the link with the years 1817 to 1955.
The early 1970s saw increasing steel production in Belgium, peaking in 1974, when there were nine major steelworks in operation. This resulted in overproduction, as the market was becoming saturated, and meant that drastic measures had to be taken. By 1979 both production and the number of plants had been halved, with reductions in the workforce continuing up until 1985, by which time employment in the industry had fallen to half its 1975 level. The Charleroi region, which had not benefited from the concentration effected in Liège ten years earlier, was now obliged to undergo its own rationalization, with the absorption of Thy-Marcinelle et Providence--formerly TMM--by Hainaut-Sambre in 1980. However, this step was not enough to stabilize the industry, and the government, which had already taken a 50 percent stake in the industry in 1978, now decided that complete integration of the metallurgical industries of the two regions under one management was necessary. There were also the wider problems of Belgian industry connected with the difficulties between the French-speaking Wallonia region, which includes Charleroi and Liège, and the Flemish-speaking northern regions. The two complexes were united with 80 percent state ownership (by the government of Wallonia), on June 26, 1981.
Gandois Plan, 1980s
The union took place in the depths of an economic recession, and the newly organized group of Cockerill Sambre began by posting massive losses. The European Economic Community was insisting that large government subsidies to the industry were unfair and had to be reduced substantially. A new center-right government introduced economic austerity measures and commissioned a report on the steel industry. This proposed further reductions in capacity, including plant closures at Cockerill Sambre--one at Charleroi and one at Liège--and more job losses. Each region was to be allotted a specialty. The restructuring plan, known as the "Gandois report," after the present chairman of Cockerill Sambre, was implemented in 1984. Production of steel was stabilized at around 1975 levels, concentrated on only three plants, and the workforce was reduced to 15,000, with the hope of even more reductions. It was also agreed that Arbed S.A., the Luxembourg state steel producer, would reduce its rolled steel capacity in exchange for the securing of orders from Cockerill.
The number of blast furnaces operating in Wallonia declined from their peak of 30 during the postwar period up to 1963: only a third of these were in use by the late 1970s, and by 1988 only four remained at Cockerill Sambre.
Within a few years of the implementation of the Gandois plan, the success of the measures had become evident, with the company being given a new lease of life, and diversification into other steel-based products taking place. The mid-1980s were a relatively stable period, culminating in further internal rationalizations, such as the decision to specialize in thin flat products on the steel production side; the development of new products such as coated steel roof tiles by the French-based construction products division; and concentration on heavy engineering in the mechanical engineering division. In 1990 came the acquisition of a majority holding in Ymos A.G., a major German manufacturer of metal and plastic parts for automobiles. Other diversification moves included ventures into financial and data processing services as well as environmental management services.
1990s Struggles Led to Sale of Majority Stake to Usinor
In the early 1990s, the entire European steel industry, largely state-owned at the time, was in crisis. International competition, most notably from Japanese and Korean steelmakers, kept prices chronically depressed. Only a US$8.5 billion 1993 bailout from the European Union saved the industry. Privatization, restructuring, and consolidation were the watchwords of the decade, and mergers created three dominating European steel giants: Arbed of Luxembourg, Usinor of France, and Thyssen-Krupp Stahl AG of Germany.
Cockerill Sambre posted losses of BFr 1.39 billion in 1992 and BFr 6.5 billion in 1993 before recovering somewhat in 1994, when it recorded net income of BFr 807 million. In early 1995 Cockerill paid DM 150 million (US$100 million) for a 60 percent stake in GmbH EKO Stahl, which had run the largest steel plant in East Germany prior to German reunification.
In September 1996 the still struggling Cockerill said that it would seek an alliance with another European steelmaker. The company also announced the launch of the "Horizon 2000" plan, a restructuring aimed at significantly reducing costs at one of Europe's most inefficient steelmakers by the turn of the century. To implement the plan, the company expected to cut more than 2,200 jobs from its 10,000-person workforce in Belgium. In late 1996 merger discussions with privately owned Belgian steelmaker Usines Gustave Boël led nowhere. For fiscal 1996, Cockerill posted a net loss of BFr 8.97 billion, including exceptional costs of BFr 7.7 billion related to "Horizon 2000."
In 1997, while still seeking out potential partners, Cockerill Sambre reached the decision to focus its operations on three core areas: integrated steelmaking, steel distribution, and the manufacture of steel-based construction products. The company subsequently exited from the manufacture of automotive components with the 1997 disposal of Ymos. By the beginning of 1998 Cockerill had largely divested its environmental management services sector.
In early 1998 the company and the government of Wallonia, which owned almost 79 percent of Cockerill Sambre at the time, began studying possible alliances. Two main partners soon emerged: Usinor and Thyssen-Krupp Stahl. The latter, however, dropped out of the bidding soon after it was named one of the two finalists. In mid-October 1998 Usinor agreed to acquire a 75 percent stake in Cockerill for about BFr 36 billion (US$1.1 billion), a move that would make the French company one of the three largest steelmakers in the world (along with Nippon Steel Co. of Japan and South Korea's Pohang Iron & Steel Co.). Under the agreement, Usinor would acquire 54 percent of Cockerill from the Wallonian government as well as the 21 percent held publicly. The government would retain a 25 percent "blocking" minority, with veto power over major strategic decisions concerning the Cockerill workforce for five years. Another condition of the agreement was that Cockerill would have to acquire the 40 percent of EKO Stahl it did not already own. Usinor agreed to invest BFr 30 billion (US$890 million) in Cockerill over a five-year period. Francis Mer, president of Usinor, was slated to serve as president of Cockerill Sambre following the deal's completion.
Principal Subsidiaries: Integrated Steel: S.A. Beautor (France; 99.24%); S.A. Société Carolorégienne de Cokéfaction (CARCOKE) (78.1%); S.A. Société Carolorégienne de Laminage (CARLAM) (75.31%); S.A. Cockerill Sambre Tailored Blanks; S.A. Tôleries Delloye-Matthieu (TDM) (99.6%); GmbH EKO Stahl (Germany; 60%); S.C.R.L. Eurogal; GmbH Steelinter Deutschland (Germany); S.R.L. Steelinter Italia (Italy; 94.19%); Steelinter (UK) Ltd; SàRL Galvalange (Luxembourg; 50%); S.C. Segal (33.33%). Distribution: S.A. Disteel; S.A. Distell Cold; GmbH EKO Feinblechhandel (Germany); GmbH EKO Handelsunion (Germany); A.B. Eurinter Svenska (Sweden); S.A. Laminoirs de Longtain (99.99%); S.A. Mosacier; S.A. Société Belge d'Oxycougape (OXYBEL) (74.93%); S.A. Profilsteel; mbH SRW-SPS Verwaltungsgesellschaft (Germany); GmbH SPS Südband Stahl-Service-Center (Germany); Groupe PUM dont Groupe Jean D'Huart (France); Groupe Dikema & Chabot (Netherlands); Fratelli Canessa (Italy; 51%); Groupe Dikema Stäl (Norway); ASK McGowan (U.K.; 65.5%). Construction: GmbH EKO Bauteile (Germany); GmbH Polydach Dachsysteme (Germany); Groupe Haironville (France); S.A. Metal Profil Belgium; S.A. Monopanel (France); S.A. Panneaux Frigorifiques Françs (France); GmbH Haironville Deutschland (Germany); GmbH Haironville Profilvertrieb (Germany); GmbH Haironville Austria; A.S. Haironville Danmark (Denmark); A.S. Haironville Norge (Norway); A.B. Haironville Sverige (Sweden); Tac Metal Forming Ltd (U.K.); S.A. Europerfil (Spain; 50%); S.A. Haironville Portugal (70%); s.r.o. Haironville Bohemia (Czech Republic; 98%); Haironville Polska (Poland). Mechanical Engineering: S.A. Cockerill Mechanical Industries (CMI); S.A. Cockerill Forges and Ringmill (CFR); S.A. Espace Mobile International (EMI); S.A. Heurbel. Services: S.A. Société d'Opérations Maritimes et Fluviales (SOMEF); S.A. Société de Service et d'Ingénierie en Informatique, Bureautique et Télématique (IBT); S.C. Recherche et Développement du Groupe Cockerill Sambre (RD-CS) (99%); S.A. Cockerill Sambre Finances et Services (CSFS).
Principal Divisions: Integrated Steel Division; Distribution Division; Construction Division; Mechanical Engineering Division; Services Division.