In the first half of 2009 the sales in the Romanian market of the world's largest integrated metals and mining company ArcelorMittal decreased by 68.3 percent to $258 million, compared to $813 million in the same period last year.
The reduction was sharper than the average sales decrease of 61.2 percent registered by ArcelorMittal in Europe (totaling $14.8 billion for the period in question), and was caused by low demand from Romania's machine building, shipbuilding and construction industries, which due to the crisis also registered a sizeable reduction of orders.
Due to decreased sales, ArcelorMittal's largest Romania-based subsidiary ArcelorMittal Galati in the first six months of 2009 closed almost half of its production capacities and laid off about 3,000 workers under a voluntary leave program. In January-June 2009, the plant produced between 500,000 and 600,000 mt of steel, compared to two million mt produced in the first half of 2008.
Meanwhile, trade unionists have claimed that ArcelorMittal Galati has violated the plant's privatization contract, by closing its coke plant Uzina Cocso-Chimica (UCC) in May. The company has denied the allegations and is expected to negotiate with Romania's Authority for State Assets Recovery (AVAS) for an addition to the privatization contract signed in 2001, which will guarantee the continuation of investment and the functioning of the plant, and will also include an investment package for coke production.
ArcelorMittal has also denied local media reports which say that its other Romania-based subsidiary ArcelorMittal Hunedoara might be shut down by the end of the current year, and that the plant is gradually selling off its rolling mills for scrap. Meanwhile, according to the reports, trade unionists at the plant intend to sue AVAS and ArcelorMittal for violation of contractual obligations and for the destruction of the Hunedoara plant.
In Romania, ArcelorMittal owns the Hunedoara and Galati steelmaking units, ArcelorMittal Tubular Products Roman, ArcelorMittal Tubular Products Iasi, the Romportmet Galati harbor and the local branch of its construction company ArcelorMittal Construction.