New communities develop around the iron mill
Just as paper mills have given rise to many small villages in Sweden, a large part of society developed around two factors that were the seeds of today’s Swedish steel industry, namely mines and iron mills. As a result of rationalizations due to increased international competition at the end of the 1800s, the small-scale iron mills in Bergslagen were replaced by larger mills. With the introduction of the new railway line between Falun and Gothenburg, in 1872, a decision was taken to establish a new iron mill, Domnarvets Jernverk, at Domnarvsforsen in Borlänge. Together with a nearby paper mill, the iron mill contributed to a large population influx. The owners of the mills built housing for the substantial number of industrial workers and professional and clerical staff who were employed in the industry.
Following an extensive modernization and development program in the middle of the 1950s, steel production in Domnarvet amounted to 400,000 tonnes per year. At one time this was the largest steel mill in Sweden and, in 1973, employed 6,300 people.
Steel mill along the coast
Iron ore for export was transported by rail from Grängesberg to Oxelösund, which is the deepest port in northern Europe. It was a natural development to establish an iron mill in Oxelösund, which took place between 1914 and 1917. The mill was the first in Sweden to use coke, extracted from stone coal in the plant’s own coking plant, in the production of iron. During the 1950s, the iron mill developed into the largest workplace in Oxelösund and was of great importance for the economy of the town.
Proximity to iron ore
In 1938, the report of the so-called Pig Iron Committee proposed that an iron mill be established in Luleå and, in 1940, Norrbottens Järnverk AB, NJA, was formed with the Swedish State as owner. The modern city of Luleå had developed since the Malmbanan railway was built towards the end of the 1880s.
At the beginning of the 1960’s, NJA was Sweden’s second-largest steel producer with an annual production of 400,000 tonnes and accounted for 30 percent of Sweden’s exports of rolled steel products.
SSAB is formed
In the middle of the 1970s, the steel industry in the western world was characterized by an extensive need for restructuring due to the energy crisis. In combination with significant excess capacity, outdated equipment and high labor costs, the situation was devastating. Faced with competition from new manufacturing countries with modern equipment and low production costs, the losses became great. In addition, there was a lack of capital for necessary investments.
Following a decision by the Swedish Parliament in 1977, NJA, Domnarvets Jernverk and Oxelösund were merged into a single company, SSAB, with the Swedish State as the owner. SSAB commenced its operations on January 1, 1978. In 1989, SSAB’s shares were listed on the Stockholm Stock Exchange.
The decades that followed since the formation have been characterized by upturns and downturns in the economy. At an early stage, SSAB decided to focus on niche products in the form of high-strength steel qualities and the business has been gradually streamlined in order to increase profitability. At the time of formation, SSAB had eight blast furnaces. Today, SSAB has three blast furnaces but produces significantly greater quantities than previously.
With the acquisition of IPSCO in North America in 2007, SSAB carried out one of the largest Swedish corporate acquisitions of modern times. Through the acquisition, SSAB can increase its competitiveness and profitability outside Europe.
Today, SSAB has a clear and strong presence on two important domestic markets and remains an important factor in the community in those localities where SSAB operates.