ECONOMY

Bulgarian steel mill eyes expansion in Balkans

SOFIA – Bulgaria’s largest steel mill, Kremikovtzi, plans to invest up to 40 million euros this year to boost its efficiency and expand abroad to become a leading producer in the Balkans, the company said yesterday. The company said it will bid next Wednesday to privatize a plant for galvanized steel in Kosovo with an annual capacity of 100,000 tons in an attempt to become the top producer in the region for the product. The company bought a Serbian plant for pre-painted sheet steel, Lemind, for 1.4 million euros in February and doubled its annual capacity for pre-painted metals to 72,000 tons, Kremikovtzi Executive Director Valentin Zahariev said. «Our investment intentions are becoming more aggressive. We plan to expand in the region to secure a dominant position,» Zahariev told reporters. «With the Lemind plant, we will be the dominant producer of pre-painted steel in the Balkans. We are aiming to become a leader in galvanized steel by acquiring the Kosovo plant.» Kremikovtzi, which is 71 percent-controlled by Bulgaria’s Finmetals Holding, said it plans to boost efficiency and increase end-product output from 1.18 million tons in 2004. The surge in global steel prices helped the company to increase revenues from end-products by 30 percent to 883 million levs ($585.5 million) last year, despite a 14-percent fall in its raw steel output to 1.43 million tons. The decrease was due to the closure of one of its three blast furnaces under an agreement with the European Union. A further fall in output was likely in 2005 as the mill plans a six-month overhaul of one of its furnaces, Zahariev said. The company posted a net profit of 80 million levs last year, compared with 120 million levs in 2003, which was then achieved mainly due to a revaluation of its assets. Kremikovtzi, which was privatized for a token price of $1 in 1999, said it has reduced its outstanding debts to 227 million levs and was continuing talks for a strategic partnership with Indian steel giant Ispat Industries. A representative of Ispat Industries has already had a seat on Kremikovtzi’s managing board since August and Bulgarian media have speculated that the steel firm will acquire the 71 percent stake owned by Finmetals Holding for at least $300 million.