ECONOMY

Makstil to raise capacity

SKOPJE (SeeNews) – The Former Yugoslav Republic of Macedonia (FYROM)’s only steel mill, Makstil, majority-owned by Swiss-based steel group Duferco, plans to increase its capacity by 50 percent over three years due to growing global demand for hot-rolled products, a senior executive said on Monday. «For 2006 we plan to increase slab production by 2 percent to 320,000 tons and improve the quality of the steel products,» company Deputy Director Mitko Kocovski told SeeNews in a telephone interview. Makstil can produce 320,000 tons of slab and 320,000 tons of steel plates per year. It produced 315,000 tons of slabs in 2005, compared with 310,000 in 2004. In early 2005 Makstil started the next stage in its long-term development program and invested some 3 million euros in scrap-processing equipment, which would back the planned increase in output, Kocovski said. «The investment plan through 2009 is still coordinated with Duferco, and it would involve some $15-20 million [12.5-16.6 million euros]. We already have the support of some European banks,» he added. Makstil, backed by Duferco, has used a $15 million (12.5-million-euro) loan from the European Bank for Reconstruction and Development (EBRD), which allowed it to modernize, to cut its dust emissions and improve energy efficiency since 1998. «The rise in profit for 2006 will depend on how far Makstil succeeds in raising output and sales, but also on the price of steel on international markets. I expect some $85 million in sales revenue this year,» Kocovski said. Makstil reported 4,440.6 million denars (72.5 million euros) in sales revenue for 2005, up from 3,821.6 million in 2004. Kocovski said demand for steel is quite high in the region as the privatization process in neighboring Bulgaria, Serbia and other ex-Yugoslav republics has revived key metal processing activities, such as river and sea shipbuilding and the machinery industry. He added that Croatia imports about 100,000 tons of steel plates a year, mostly for its shipbuilders. «Our expansion targets Bulgaria, where we place 15,000 tons of our annual production, supplying shipbuilders, the rolling stock industry and the energy sector,» Kocovski said. He also expects growing demand for Makstil plates in Serbia as ongoing restructuring of the Serbian steel sector could revive imports of FYROM steel. Makstil exported 50,000 tons of plates to Serbia annually during the communist era, compared to about 15,000 tons in recent years. Steel plates for the shipbuilding industry account for up to 75 percent of Makstil’s output. «New standards of shipbuilding, which require double hulls for vessels, will spur the demand for steel plates as adjustments to existing ships and the building of new ones will require more steel,» the Makstil executive said.