BELGRADE (Reuters) – Montenegro’s sole aluminum plant Kombinat Aluminijuma Podgorica (KAP) said on Monday it planned to maintain this year’s production of 120,000 tons of aluminum in 2004 and further reduce costs. KAP’s head Mihailo Banjevic said he hoped that privatization of the company would continue as planned next year with the help of BNP Paribas, its financial adviser. The European Bank for Reconstruction and Development in September granted a 3.0-million-euro ($3.75 million) loan to pay for the adviser, but the union of Serbia and Montenegro has to ratify the loan before funds can be released. The Montenegrin government, Banjevic said, is trying to find money to start paying for the job until the loan is ratified. «Any further delays of KAP’s privatization would be a disaster for the plant that needs to be modernized. We are pushing the production to its limits, setting the 2004 target again at 120,000 tons,» Banjevic told Reuters by phone. The 32-year-old KAP, of French Pechiney technology, produced 116,000 tons of aluminum in 2002, above its installed capacity of 102,000 tons. Montenegro has said the sale of a majority 65.53 percent stake of KAP – its major exporter also accounting for nearly half of the country’s industrial production – is one of its priorities. Banjevic said KAP’s export grew by $14 million to $154 million this year. He blamed an unfavorable US dollar/euro rate for the loss of $5.2 million this year because 42 percent of KAP’s expenditures were in euros. «That is why it will be very difficult to further reduce production costs, which in December stood at $1,368 per ton of aluminum, significantly higher than in the first six months this year,» he said. The average production cost per ton was $1,349 this year. Reducing the work force was one of the ways to cut costs, Banjevic said, adding he expected 240 more people would leave the plant next year. KAP employs around 2,750 workers. But a big problem for the company and future investors, he said, was the 384 disabled persons still on KAP’s pay list, because a law did not allow the firm to sack them. «These are relics of the old communist regime which must be resolved because a future foreign investor will not accept to pay for that,» Banjevic added. Russia’s SUAL has already said it is interested in the plant.