ECONOMY

Metals groups stay strong

The domestic metal-processing industry is bucking the global trend: Despite a difficult last couple of years on the world market with the dramatic ups and downs of metals prices, Greek companies have managed to stay strong and to benefit from the international conjunction. Steel companies have performed best, as their products’ prices have been recovering since the start of the current financial year. The sector’s big local industries have surpassed the problems they had faced in recent years and have proceeded with major investments. Production is on the increase, since, according to estimates by the Foundation for Economic and Industrial Research (IOBE), it has recorded an annual growth of 3 percent from 1993 to 2010. Aluminum-processing industries also are moving positively. The sector employs directly or indirectly some 40,000 people, manufactures more than 280,000 tons of aluminum per year, has strong export activity and a volume that exceeds 2 billion euros, which corresponds to 1.7 percent of the gross domestic product. Aluminium of Greece, which now belongs to the Mytilineos group, hopes that the price of primary aluminum will keep rising on international markets. The latest news suggests that the group is negotiating the purchase of ELMIN SA, a Vardinoyiannis group company involved in all types of minerals. Metal industries, however, have to overcome the problem of the reduced profit margins of the last two years, owing to the increased competition created both by an international recession and the rise in the production capacity of nearly all companies in the sector. Among the problems that the metal industry is facing are the high cost of electricity and the small size of the domestic market, which leads major industries to the international markets, where competition is particularly stiff. In the metal-processing sector, Viohalco group’s ELVAL holds a high position internationally among aluminum processing companies and is effectively the sole such firm in Greece. It has put together an investment program that gives the company a 200,000-ton per year production potential. Part of this is exported to more than 70 countries. Its sister company Halcor has in the last couple of years realized significant investments with the plant of its Bulgarian subsidiary Sofia Med AD, which reach 35 million euros and gives the plant a total production capacity of 85,000 tons. Hellas Can has created a new plant in Seville, Spain, where refreshments and beer cans are made. The Seville plant covers the increasing demand of the refreshments sector’s customers in Spain and Portugal, with installations which cover 36,000 square meters. Larco continues its efforts to increase its output and productivity as well as improving its operating costs, and has over the last two years completed an investment program of 44 million euros: The company has begun operating a nickel recycling unit, compressing costs and contributing to the rise of production. It also plans to render itself independent from the Public Power Corporation (PPC) with the creation of a self-sufficient energy production unit. The Maillis group is also continuing its expansion and rise in profits, focusing on the rationalization of its subsidiary companies’ network, enriching its product range and investing in research and development programs. The start of operation of a new plant in Greenville, North Carolina, is an addition to the solid base of machinery production the group already has in Canada and the USA, creating the conditions for very rapid development. The group’s founder and president, Michalis Maillis, stated recently that for this year the group expects a growth rate of 15 percent. He added that the 2004 results show the absorption of firms acquired as well as marking a new cycle of growth with an increase of market shares in Europe, the expansion into North America and the penetration of new markets, such as Russia, Ukraine and Turkey.