ECONOMY

Aluminium of Greece sets out on cost-cutting mission

Aluminium of Greece, majority-owned by Canada’s Alcan, will aim at boosting productivity and cutting costs while also re-examining its current investment proposals with the help of its parent company, its chairman, Iason Stratos, told Kathimerini in an interview. In his first press interview since Alcan took control of Aluminium of Greece after its takeover of previous owner France’s Pechiney in 2003, Stratos talks about what the Canadian company has in store for its Greek subsidiary. What plans do Aluminium of Greece’s new owners have in Greece? Alcan has undertaken the obligations that Pechiney had up till today as far as its management and the technical support offered to Aluminium of Greece is concerned. From the day it took over, Alcan has taken steps to assess Aluminium of Greece’s position in the group, according to practices it implements internationally. Today, we are at the stage where we are examining and assessing everything regarding Aluminium of Greece, everything needed for an investment in a production unit. So the board of directors of Alcan and Aluminium of Greece have jointly focused on how they can work together and come up with methods aimed at cutting costs and lifting productivity. Within this new cooperation framework, we are re-examining investing in a steam production and electrical energy plant, a plan which is being assessed due to the expiration of the Public Power Corporation (PPC) contract in 2006 which supplies us with energy. Meanwhile, what is also important is the recognition of the benefits available from our inclusion in the Alcan group. This means an exchange of experience, technical knowhow, work practices and cooperation on energy issues which rank on a much larger scale. I also need to add that during this assessment stage, Aluminium of Greece has been awarded for its good industrial performance and its excellent health and environmental practices. We are among the group’s best units regarding issues of continual improvement. What are the main priorities regarding investments? There is cooperation between the two boards over those projects which will create value and we are searching for the best possible solution for Aluminium of Greece’s energy supply needs as of 2006, since the contract with PPC ends then. The results of this study will precede the immediate implementation of measures aimed at improving and reducing costs which will help secure the company’s feasibility. Maintaining Aluminium of Greece’s competitiveness is a challenge for today and for the next day. As part of this new strategic framework, we are examining the joint production of a steam and and electrical energy plant which would meet 100 percent of our energy needs. Other projects being assessed include an increase in aluminium production. At this point, I would like to highlight the State’s positive approach to these investment ideas. What is the climate among the employees on talk that Alcan will withdraw from its investment in the Aspra Spitia region (about 100 kilometers, or 62 miles, northwest of Athens)? The workers’ representatives have already met and been informed by Alcan. The workers are on hold but are also optimistic about our company’s future due to the responsible handling of Alcan’s strategic planning. The main priority focuses on finding the best solution for Aluminium of Greece. All possible solutions are being examined in depth and there is optimism that the best solution will be found which will suit everyone’s interest. The workers know that a study has already started for the assessment of the new project with the support of specialized knowledge offered by Alcan. As we know. Alcan produces 65 percent of the energy it consumes. The study’s results will be necessary for the final decision regarding the co-production of energy. How are the company’s earnings shaping up this year? First-quarter pretax profit this year reached 12.8 million euros versus 10.4 million euros in the same period in 2003, showing growth of 24 percent. Aluminium of Greece’s first-quarter consolidated pretax profit, which included local subsidiary Delfoi-Distomon, grew 47 percent year-on-year to 13.2 million euros against 9 million euros in the previous period. If current price trends in aluminium continue along with stability in the euro/dollar exchange and macroeconomic indicators, then earnings for the remainder of the year will continue at the same levels. To what extent do oil prices affect Aluminium of Greece? Hikes in petrol prices are another factor which is seriously taken into consideration when examining competitiveness and energy investments. Petrol prices are also related to the cost of natural gas, which due to today’s geopolitical uncertainty are more closely linked to higher risks. What do you expect the government’s new development law to deliver? It is commonly known that we need to simplify procedures, get rid of obstacles putting off incentives, stamp out bureaucracy, factors which curb business growth.