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German supermarket giant Aldi bucks Brexit trend with huge UK expansion

Aldi on Monday said it planned to open more than 100 UK stores over the next two years

German supermarket giant Aldi bucks Brexit trend with huge UK expansion
Aldi is expanding in the UK. Photo: DPA

The move will create a total of 5,000 jobs, the firm said. Longer-term it wants to have 1,200 UK-wide supermarkets by the end of 2025, up from 840 currently, it added in a results statement.

Over the next six years, it plans to also more than double its London sites to 100 from 45.

The decision comes as other German firms have announced uncertainty over their UK operations or their trade relationship with the UK with Brexit looming.

READ ALSO: German business warns of Brexit 'chaos'

Recent figures from July showed trade between Germany and the UK had already shrunk significantly this year.

The German Chamber of Industry and Commerce estimates that 70 percent of German companies with business in Britain expected trade to drop in 2019.

Meanwhile, German luxury car manufacturer BMW revealed it will temporarily close its British plant in Oxford for two days around the current scheduled date for Brexit.

'Focus on London'

However, German discount supermarkets are bucking the trend and growing their businesses in the UK, despite drops in profit.

“Whilst our expansion will continue to reach every part of the UK, we're increasing our focus on London,”  said Giles Hurley, chief executive at Aldi UK and Ireland.

The news comes three months after Aldi's German rival Lidl revealed it also seeks to bolster its London presence with 40 new stores creating 1,500 jobs over five years.

Both German discount chains have boomed in recent years as Britons seek to slash their food bills, eating into profits at traditional supermarkets like number one Tesco and WalMart-owned Asda.

Aldi's UK division revealed on Monday that pre-tax profit sank almost one-fifth last year to £182.2 million (€206 million) on price cuts.

The group was hurt also by higher infrastructure costs, offset however by annual sales surging 11 percent to a record £11.3 billion.

 

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ENVIRONMENT

Sweden’s SSAB to build €4.5bn green steel plant in Luleå 

The Swedish steel giant SSAB has announced plans to build a new steel plant in Luleå for 52 billion kronor (€4.5 billion), with the new plant expected to produce 2.5 million tons of steel a year from 2028.

Sweden's SSAB to build €4.5bn green steel plant in Luleå 

“The transformation of Luleå is a major step on our journey to fossil-free steel production,” the company’s chief executive, Martin Lindqvist, said in a press release. “We will remove seven percent of Sweden’s carbon dioxide emissions, strengthen our competitiveness and secure jobs with the most cost-effective and sustainable sheet metal production in Europe.”

The new mini-mill, which is expected to start production at the end of 2028 and to hit full capacity in 2029, will include two electric arc furnaces, advanced secondary metallurgy, a direct strip rolling mill to produce SSABs specialty products, and a cold rolling complex to develop premium products for the transport industry.

It will be fed partly from hydrogen reduced iron ore produced at the HYBRIT joint venture in Gälliväre and partly with scrap steel. The company hopes to receive its environemntal permits by the end of 2024.

READ ALSO: 

The announcement comes just one week after SSAB revealed that it was seeking $500m in funding from the US government to develop a second HYBRIT manufacturing facility, using green hydrogen instead of fossil fuels to produce direct reduced iron and steel.

The company said it also hoped to expand capacity at SSAB’s steel mill in Montpelier, Iowa. 

The two new investment announcements strengthen the company’s claim to be the global pioneer in fossil-free steel.

It produced the world’s first sponge iron made with hydrogen instead of coke at its Hybrit pilot plant in Luleå in 2021. Gälliväre was chosen that same year as the site for the world’s first industrial scale plant using the technology. 

In 2023, SSAB announced it would transform its steel mill in Oxelösund to fossil-free production.

The company’s Raahe mill in Finland, which currently has new most advanced equipment, will be the last of the company’s big plants to shift away from blast furnaces. 

The steel industry currently produces 7 percent of the world’s carbon dioxide emissions, and shifting to hydrogen reduced steel and closing blast furnaces will reduce Sweden’s carbon emissions by 10 per cent and Finland’s by 7 per cent.

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