Kremikovtzi dealing problems over accident and investment plan
According to the reports from the industry, operation management is found responsible for the accident that took place on January 10 and resulted in death of three people, together with some injuries at Bulgarian steel maker Kremikovtzi. The accident raised concerns and complaints from several trade unions about workers' protection against such accidents, throughout the country.
One of the trade unions, Podkrepa, announced last week that they have sent a letter to the steel plant including suggestions for the purpose to improve working and protection conditions. Besides, Confederation of Independent Trade Unions in
Bulgaria (CITUB) disclosed its objections regarding unfavorable working conditions as well as timeworn equipments at the plant. CITUB also notified that all insecure companies will be shut down following
Bulgaria's access to the EU.
Furthermore, Kremikovtzi has problems in complying with the investment plan submitted in 1999, during its privatization. According to the plan $50 million annually had to be invested in the plant between years 2000-2005. However it is decided by the Post Privatization Control Agency (PPCA) that Bulgarian Finmetals Holding (former Daru Metals), which holds 71% of Kremikovtzi, is to pay $5 million per year due to its incompliance with the investment plan.
However, towards the end of last year, Kremikovtzi reported that total
investments passed $200 million, $110 million of which was spent for the new blast furnace where the accident took place. Company said that they are planning a €35 million (around $44 million) investment for machinery and equipment this year, and a further $20 million for reconditioning of no.3 blast furnace. For 2007, a new environmental system is planned to replace blast furnaces against approx. €240 million (around $303 million).
25.29% state owned steel plant Kremikovtzi is said to be indebted to several enterprises, such as the National Electricity Company (NEC) and BDZ, railway carrier. The plant's debt of Leva 70 million ($45 million) to NEC, which has been accumulated since 2001, will be paid in a ten year period according to a deal recently signed with NEC. Last year, Kremikovtzi signed a similar deal for repayment of its debt with Bulgarzaz. A certain amount of its outstanding payments to both companies, were written off during its privatization. Towards the end of 2002, railway carrier BDZ terminated its contract with the plant, interrupting the Kremikovtzi's deliveries. Debt owed to BDZ is reportedly Leva 4 million ($2.6 million). Meanwhile, the Environment Ministry ruled to charge from the plant around Leva 4.5 million (around $3 million) for pollution.
Despite these adverse circumstances, Kremikovtzi reported Leva 53.7 million profit and Leva 552 million sales revenue for 2003 with total liabilities accounting Leva 1 billion ($643 million).
As previously reported by SteelOrbis, Kremikovtzi is planning to launch
production at its second continuous
slab caster this year and also is to sign a €1 billion deal with European biggest
pipe maker, Italian mill
Marcegaglia, to supply metallurgical products.