Kremikovtzi AD
Encyclopedia
Kremikovtzi AD is Bulgaria
's largest metalworking
company. The construction of its facilities began on 5 November 1960 and the first production capacities were put into operation in 1963 to produce cast iron
and coke
, with production extending to cover other areas in the 1960s and 1970s. The company was privatised
in 1999, 71% of it was acquired by a Bulgarian owned company — Daru Metals (later to change its name to Finmetals Holdings). In 2005 Valentin Zahariev and Kiril Zahariev sold 100% of Finmetals Holdings for US$110 million to Global Steel Holdings Limited (GSHL), owned by Pramod Mittal, brother of the highly successful Lakshmi Mittal
. Kremikovtzi is not related to the Arcelor Mittal group.
The new management brought by the Global Steel Holdings Limited has embarked on an investment program aiming to increase the product quality, reduce the production costs and widen the product range. The key focus of this was the finalization of the new Continuous Caster and a new Converter; both of these were finally put in full operation in November 2006, after being under construction for more than 15 years.
Most of Kremikovtzi AD's production is exported to the European Union
, Turkey
, some of the former Yugoslav
countries, the USA and China
. The profit was 120 million leva
in 2003 and 80 million leva in 2004. However, bad management and other factors led to the company generating losses of more than BGN 200 million for 2005.
Kremikovtzi AD acquired 70% of the LEMIND-FPL polyester
-covered sheet iron factory in Leskovac
, Serbia
in January 2005, for €1.4 million. The company also made another acquisition in April 2005, purchasing the Llamkos galvanised sheet iron factory in Vucitrn
, Kosovo
for €4.15 million. Both plants were disposed of upon Kremikovtzi's takeover by GSHL.
In November 2006, the debt obligations of the company were subject to extreme price volatility
as speculation mounted about the depth of commitment to the business by GHSL. Pramod Mittal, the company's owner, issued a statement to reassure investors of his ongoing interest in Kremikovtzi's success; but this was not sufficient to dampen the ongoing volatility of the debt price. At the beginning of December 2006, GSHL issued another statement, this time committing to inject cash into the business on an ongoing, quarterly basis.
Since December 2008 the factory is virtually non-functioning, kept in a safe-standby mode.
On May 15, 2009, the coke production plant - one of the most controversial symbols of the company - has been shut down forever.
Gas supply (main fuel for the factory's operations) has been cut off, although it can be restored. The fate of the company is unknown, but prospects are gloomy.
]
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
's largest metalworking
Metalworking
Metalworking is the process of working with metals to create individual parts, assemblies, or large scale structures. The term covers a wide range of work from large ships and bridges to precise engine parts and delicate jewelry. It therefore includes a correspondingly wide range of skills,...
company. The construction of its facilities began on 5 November 1960 and the first production capacities were put into operation in 1963 to produce cast iron
Cast iron
Cast iron is derived from pig iron, and while it usually refers to gray iron, it also identifies a large group of ferrous alloys which solidify with a eutectic. The color of a fractured surface can be used to identify an alloy. White cast iron is named after its white surface when fractured, due...
and coke
Coke (fuel)
Coke is the solid carbonaceous material derived from destructive distillation of low-ash, low-sulfur bituminous coal. Cokes from coal are grey, hard, and porous. While coke can be formed naturally, the commonly used form is man-made.- History :...
, with production extending to cover other areas in the 1960s and 1970s. The company was privatised
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
in 1999, 71% of it was acquired by a Bulgarian owned company — Daru Metals (later to change its name to Finmetals Holdings). In 2005 Valentin Zahariev and Kiril Zahariev sold 100% of Finmetals Holdings for US$110 million to Global Steel Holdings Limited (GSHL), owned by Pramod Mittal, brother of the highly successful Lakshmi Mittal
Lakshmi Mittal
Lakshmi Narayan Mittal is an Indian steel magnate. He is the chairman and chief executive officer of ArcelorMittal, the world’s largest steelmaking company....
. Kremikovtzi is not related to the Arcelor Mittal group.
The new management brought by the Global Steel Holdings Limited has embarked on an investment program aiming to increase the product quality, reduce the production costs and widen the product range. The key focus of this was the finalization of the new Continuous Caster and a new Converter; both of these were finally put in full operation in November 2006, after being under construction for more than 15 years.
Most of Kremikovtzi AD's production is exported to the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
, some of the former Yugoslav
Yugoslavia
Yugoslavia refers to three political entities that existed successively on the western part of the Balkans during most of the 20th century....
countries, the USA and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. The profit was 120 million leva
Bulgarian lev
The lev is the currency of Bulgaria. It is divided in 100 stotinki . In archaic Bulgarian the word "lev" meant "lion".It is speculated that Bulgaria, as a member of the European Union will adopt the Euro in 2015 .- First lev, 1881–1952 :...
in 2003 and 80 million leva in 2004. However, bad management and other factors led to the company generating losses of more than BGN 200 million for 2005.
Kremikovtzi AD acquired 70% of the LEMIND-FPL polyester
Polyester
Polyester is a category of polymers which contain the ester functional group in their main chain. Although there are many polyesters, the term "polyester" as a specific material most commonly refers to polyethylene terephthalate...
-covered sheet iron factory in Leskovac
Leskovac
Leskovac is a city and municipality in southern Serbia. It is the administrative center of the Jablanica District of Serbia...
, Serbia
Serbia
Serbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...
in January 2005, for €1.4 million. The company also made another acquisition in April 2005, purchasing the Llamkos galvanised sheet iron factory in Vucitrn
Vucitrn
Vučitrn or Vushtrri is a city and municipality in north-eastern Kosovo. It is the seat of the Kosovska Mitrovica District. The name of the city means "wolf's thorn", the name of the spiny restharrow plant in Serbian....
, Kosovo
Kosovo
Kosovo is a region in southeastern Europe. Part of the Ottoman Empire for more than five centuries, later the Autonomous Province of Kosovo and Metohija within Serbia...
for €4.15 million. Both plants were disposed of upon Kremikovtzi's takeover by GSHL.
In November 2006, the debt obligations of the company were subject to extreme price volatility
Volatility (finance)
In finance, volatility is a measure for variation of price of a financial instrument over time. Historic volatility is derived from time series of past market prices...
as speculation mounted about the depth of commitment to the business by GHSL. Pramod Mittal, the company's owner, issued a statement to reassure investors of his ongoing interest in Kremikovtzi's success; but this was not sufficient to dampen the ongoing volatility of the debt price. At the beginning of December 2006, GSHL issued another statement, this time committing to inject cash into the business on an ongoing, quarterly basis.
Decline and shutdown of production
Mittal withdraw from the company a year or so later, and since then the company is being kept afloat by the socialist government, desperately seeking for a potential investor. All negotiations ultimately failed, but fuel and salaries were not being paid during that period, creating additional debts for the company.Since December 2008 the factory is virtually non-functioning, kept in a safe-standby mode.
On May 15, 2009, the coke production plant - one of the most controversial symbols of the company - has been shut down forever.
Gas supply (main fuel for the factory's operations) has been cut off, although it can be restored. The fate of the company is unknown, but prospects are gloomy.
]
External links
-
- http://kremikovci.bg Website of the 'Kremikovci' area
- 1st monitoring report on steel restructuring in Bulgaria and Romania (2006) of the European CommissionEuropean CommissionThe European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
- 2nd monitoring report on steel restructuring in Bulgaria and Romania (2007) of the European CommissionEuropean CommissionThe European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
- 3rd monitoring report on steel restructuring in Bulgaria (2008) of the European CommissionEuropean CommissionThe European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....