Vorskla Steel Bulgaria, part of the Konstantin Zhevago-controlled financial group Finance and Credit, has announced the suspension of the tolling agreement with Bulgaria's largest steelmaker Kremikovtzi.
Accordingly, Vorskla Steel has refused to continue its investment program and cooperation with Kremikovtzi due to a number of obstacles from the parties involved, such as apparent unwillingness to achieve mutual understanding on the part of some of the trade union leaders, problems in recovering value added tax from the state, constant thefts of production and also sabotage. An additional factor was the aggravation of the steel market conjuncture and its stagnation.
During the three months of implementation of the tolling agreement, Vorskla Steel invested more than $118 million in Kremikovtzi, paid its outstanding debt on salaries and recovered its contracts with state monopolies of Bulgaria. Moreover, Vorskla Steel has also started to fulfill the plant's environmental commitments, and raised Kremikovtzi's production capacities, allowing it to produce about 70,000 mt of steel per month.