Italian plantmaker and special steel producer Danieli has delayed the allocation of funds needed to build a new steel mill in Europe, according to Italian financial newspaper Il Sole 24 Ore. The company had previously announced that, by the month of September, it would have allocated over €500 million of which €130 million would be used to build a new steel mill in Italy or Germany. It seems that the worsening outlook for the European economy has caused the company to pause and reflect on the issue.
Gianpietro Benedetti, president of the Buttrio, Udine-based group, has denied the influence of the macroeconomic situation: "If we paid heed to the economic market's mood, we would just do nothing. On the contrary, we will build a $400 million steelmaking plant in Europe, though we must evaluate which kind of products the market needs, and verify its sustainibility in the next five years. Our special steel business is on the rise, but Danieli wants to develop a new range of products for the mechanical, oil and automotive industries complementary to the current production of our subsidiary Acciaierie Bertoli Safau." According to Benedetti, the choice of the building site will be based on the key issue of production costs, namely energy and workforce costs.
Moreover, Danieli's president underlined the company's will to invest, citing the extra €10 million for the revamping of its historical production base in Buttrio, in excess of the €30 million initially allocated. Also, its foreign investments are numerous: in India, for example, Danieli is building in record time a new steel mill covering a surface of 84 acres.
Accordingly, the international presence of the company is set to increase, also due to a wealthy financial position: Danieli has €1.3 billion in liquid assets and less than €200 million in debts. As previously reported by SteelOrbis, in the 2010-11 financial year, the group's sales revenue grew by 20 percent reaching €3 billion, while its EBITDA exceeded €300 million. "In 2011 - concluded Benedetti - global GDP will slow down its pace, growing merely by four percent, but steel demand is still forecast to grow, especially in emerging countries, and we will be prepared to meet that demand."