Altos Hornos del Mediterráneo

Altos Hornos del Mediterráneo S.A. (AHM) was a Spanish ferrous-metallurgy company established in 1971 to develop and operate the country’s proposed fourth integrated steelworks at Sagunto in the Valencian Community. The company inherited and expanded the industrial facilities that Altos Hornos de Vizcaya had maintained at the Port of Sagunto since the early twentieth century. Its creation reflected an ambitious period of Spanish industrial planning, when rising steel consumption and public investment encouraged the construction of large integrated plants combining raw-material handling, blast furnaces, steelmaking and rolling operations. The Sagunto complex had deeper roots than AHM itself. An iron and steel industrial base had been created in the area in 1917 by Altos Hornos de Vizcaya. During the middle decades of the twentieth century, the works received ore from the Sierra Menera mines through the Ojos Negros mining railway, as well as supplies from other mining regions including the Rif and Alquife. AHM was formed to turn this historic site into a modern, large-scale integrated plant. Its founding shareholders included Altos Hornos de Vizcaya, United States Steel and financial institutions, while the Franco-era government assigned the company responsibility for carrying out the fourth integrated ferrous-metallurgy project. The business environment deteriorated soon after incorporation. The international economic crisis that began in 1973 contributed to a severe downturn in the Spanish steel industry from the mid-1970s. Domestic consumption weakened, inventories increased and the company accumulated substantial losses. A cold-rolling mill was added in 1976, but restructuring pressures intensified. AHM reported losses of 3,568 million pesetas in 1977, creating difficulties for investment and even payroll payments. State intervention followed: legislation adopted in 1978 brought the National Institute of Industry into the shareholding structure, and by 1979 INI had become the sole shareholder. During the early 1980s, AHM became part of a national restructuring debate involving the three major integrated steel producers: AHM, Altos Hornos de Vizcaya and Ensidesa. A central issue was the location of a hot-strip mill. A study commissioned from Kawasaki recommended Sagunto, but the proposal encountered strong opposition in Asturias and the Basque Country and was not adopted by the government. A subsequent restructuring decree authorized modifications at Ensidesa and Altos Hornos de Vizcaya rather than establishing the new hot-strip mill at Sagunto. The government then moved to close most of the Sagunto integrated plant. The decision triggered an extensive social and political conflict, including repeated general strikes, road blockades, demonstrations, municipal-council occupations and confrontations over the future of the works. The blast furnaces were progressively shut down, while the rolling facilities were retained. In April 1984, INI, the UGT and CCOO unions and the company works committee reached an agreement to close the head plant without dismissals. AHM ceased activity on October 5, 1984. Its remaining rolling operations formed the basis of a successor company, Siderúrgica del Mediterráneo. AHM was formally dissolved on January 13, 2004.

The industrial history behind AHM began in 1917, when Altos Hornos de Vizcaya established a ferrous-metallurgy complex at Sagunto. The site's location on the Mediterranean coast gave it access to port infrastructure and imported or domestic ore. From the 1940s through the 1950s, the works were supplied by iron extracted by the Compañía Minera de Sierra Menera at Ojos Negros and transported to the Port of Sagunto by a dedicated mining railway. Ore from Minas del Rif and, later, Minas de Alquife also contributed to the supply base. By the end of the 1960s, Spanish industrial policy was seeking greater domestic steel capacity. The revised National Ferrous Metallurgy Program anticipated continued growth in per-capita steel consumption and supported investment in integrated works. AHM was incorporated in 1971 to execute the proposed fourth integrated ferrous-metallurgy plant. Its formation involved Altos Hornos de Vizcaya, United States Steel and several banks and savings institutions. The company took over the Sagunto facilities and was expected to create a modern production chain from ore and blast furnaces through steelmaking and rolling. The forecasts underlying the project soon became unrealistic. The 1973 economic crisis developed into a major steel-industry crisis in Spain by 1975. Consumption declined, inventories rose and the costs of maintaining oversized production capacity increased. AHM was forced into restructuring while its expansion program became difficult to finance. The company installed a cold-rolling mill in 1976, but its financial position continued to deteriorate. Losses reached 3,568 million pesetas in 1977, and delayed wage payments illustrated the severity of the crisis. Ignacio Hidalgo de Cisneros became president of AHM late that year, while the separate management of AHM and Altos Hornos de Vizcaya was reinforced. The state increasingly assumed responsibility for the sector. Law 60/1978 provided emergency support for ferrous metallurgy and enabled INI to acquire a stake in AHM. By 1979, INI was the company's only shareholder. The national restructuring plan established by Royal Decree 878/1981 allocated 33,173 million pesetas to AHM within a broader 1981–1985 program. That support did not resolve the strategic disagreement over a hot-strip mill, a critical installation that could be placed at only one of the three integrated steel companies: AHM in Valencia, Altos Hornos de Vizcaya in the Basque Country or Ensidesa in Asturias. The government and industry coordinating commission asked Kawasaki to study the alternatives. Its report favored Sagunto for the hot-strip mill and did not recommend the continuous-casting steel mills associated with Ensidesa and Altos Hornos de Vizcaya. The recommendation provoked opposition in Asturias and the Basque Country, and the commission failed to reach a durable agreement. Royal Decree 1853/1983 instead authorized modifications to the hot-strip facilities at Ensidesa and Altos Hornos de Vizcaya without establishing the Kawasaki-recommended facility at Sagunto. On February 4, 1983, the Council of Ministers ordered the closure of the fourth plant and the dismantling of the blast furnaces, although the rolling mill was retained. The decision generated a sustained conflict in Sagunto. The Valencian regional industry councillor Segundo Bru obtained a temporary suspension, but further government announcements confirmed the intention to close facilities at AHM, Ensidesa and Altos Hornos de Vizcaya. Sagunto experienced multiple general strikes, demonstrations, a highway blockade and an occupation of the municipal council. In September, workers restarted structural rolling mill train number 28 after management said it would not operate; 82 workers were initially dismissed, although the dismissals did not ultimately take effect following pressure involving the Industry Ministry. The final blast-furnace shutdown was announced in December 1983. A reindustrialization program classified Sagunto as a Zone of Preferential Industrial Location and promised new activities to offset the loss of steelmaking. In February 1984, industrial workers in several parts of Spain held a day of protest in support of AHM employees. On April 4, 1984, INI, the unions and the works committee agreed to close the head plant without layoffs. AHM ended its activity on October 5, 1984. The retained rolling mill became the foundation of Siderúrgica del Mediterráneo. The former company reported turnover of 28,323 million pesetas and 3,332 employees in 1984. AHM was finally dissolved on January 13, 2004.

1. 2004Company dissolved

   AHM was legally dissolved on January 13.

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2. 1984Industrial activity ends

   An agreement provided for closure without layoffs, and AHM ceased activity on October 5.

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3. 1983Government orders closure of integrated plant

   The blast furnaces were scheduled for dismantling while the rolling mill was retained, prompting widespread protests.

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4. 1981AHM included in national restructuring plan

   Royal Decree 878/1981 assigned 33,173 million pesetas of the sector's planned reorganization resources to AHM.

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5. 1979INI becomes sole shareholder

   State ownership was consolidated when INI became AHM's sole shareholder.

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6. 1978State support law brings INI into AHM

   Emergency legislation for Spanish ferrous metallurgy enabled the National Institute of Industry to acquire a shareholding.

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7. 1976Cold-rolling mill added

   The Sagunto operation expanded its product-processing capabilities with a cold-rolling mill.

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8. 1971AHM incorporated

   Altos Hornos del Mediterráneo S.A. was created to develop Spain's fourth integrated ferrous-metallurgy plant at Sagunto.

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9. 1917Sagunto steel complex established

   Altos Hornos de Vizcaya built the industrial complex that later supplied the facilities inherited by AHM.

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A state-backed Spanish integrated steel producer created to expand national steelmaking capacity through a large plant at Sagunto.

• Integrated steelSteelmaking1971

  AHM's principal business was integrated ferrous metallurgy at Sagunto. The operation was designed to combine ore handling, blast-furnace ironmaking, steel production and downstream rolling. The integrated plant was the company's defining industrial asset, although the blast-furnace section was closed during the restructuring of the early 1980s.

• Cold-rolled steelRolled steel1976

  A cold-rolling mill was added to the Sagunto complex in 1976, extending the site's ability to process steel into more finished sheet products. The mill formed part of the downstream capacity that survived the closure of the integrated works.

• Structural rolled productsRolled steel

  The Sagunto works included structural rolling mills, including train number 28. Rolling operations were retained after the blast furnaces were dismantled and later provided the industrial foundation for Siderúrgica del Mediterráneo.

• 1983Sagunto steelworks preservation campaign

  Spain · Valencian Community · Sagunto

  Employees, unions, local institutions and residents organized a sustained campaign against the closure of AHM's integrated steel plant. Actions included general strikes, demonstrations, a blockade of the AP-7 highway, municipal-council occupation and workplace mobilization.

  Outcome. The integrated plant was ultimately closed, but the rolling mill was retained and the later agreement provided for closure without layoffs.

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• 1984Agreement to close the head plantStrategy

  After more than a year of strikes and protests, the government and workforce representatives negotiated the future of the Sagunto works.

  What changed. INI, UGT, CCOO and the works committee agreed to close the head plant without layoffs, while rolling operations continued.

  Aftermath. AHM ceased activity on October 5, and the rolling mill became the basis of Siderúrgica del Mediterráneo.

  Turnover. 28,323 million pesetas (1984)

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• 1983Closure of blast-furnace operationsStrategy

  The national restructuring program had to choose the location of a hot-strip mill among AHM, Ensidesa and Altos Hornos de Vizcaya. Although a Kawasaki study favored Sagunto, the recommendation was not adopted.

  What changed. The government ordered the fourth plant closed and authorized dismantling of the blast furnaces while retaining the rolling mill.

  Aftermath. The decision produced prolonged labor unrest and led to the eventual end of AHM's integrated steelmaking activity.

  • Ensidesa — Ensidesa was part of the competing national restructuring options for the hot-strip mill and continuous-casting capacity.
  • Altos Hornos de Vizcaya — Altos Hornos de Vizcaya was another competing integrated producer affected by the national location and restructuring debate.
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• 1979State ownership consolidatedStrategy

  Large losses and the worsening Spanish steel crisis made private and mixed ownership unable to sustain the company's restructuring needs.

  What changed. The National Institute of Industry became AHM's sole shareholder.

  Aftermath. AHM remained within the state-directed restructuring of Spain's integrated steel industry.

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• 1971Creation of a fourth integrated steel plantStrategy

  Spanish industrial policy anticipated strong growth in steel consumption and sought to expand domestic integrated production.

  What changed. AHM was incorporated to develop and operate the planned integrated works at Sagunto using inherited Altos Hornos de Vizcaya facilities.

  Aftermath. The project became exposed to the steel crisis that followed the 1973 economic shock.

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• 2004Altos Hornos del Mediterráneo is formally dissolved

  The company was legally dissolved nearly two decades after its industrial activity had ceased.

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• 1984Agreement reached for closure of AHM's head plant without layoffs

  INI, the UGT and CCOO unions and the works committee agreed on the closure of the integrated steelmaking plant without dismissals. Operations ended later that year.

  Leadership change
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• 1983Spanish government orders closure of Sagunto's fourth integrated steel plant

  The Council of Ministers ordered the closure of the fourth integrated steel plant at Sagunto and the dismantling of its blast furnaces, while the rolling mill was to remain in operation.

  Regulation
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• 1983Sagunto workers and residents organize prolonged protests against AHM closure

  Workers, local authorities and residents staged numerous strikes, demonstrations, highway blockades and other actions opposing the planned shutdown and seeking to preserve steelmaking employment in Sagunto.

  OtherRegulation
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1. Altos Hornos del Mediterráneo