SEE INDUSTRY AT A GLANCE Metals in Southeast Europe
August 2009
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This industry overview is an integral part of SEE TOP 100, Edition 2009 – a comprehensive, in- depth guide to the transition economies of Southeast Europe, published be SeeNews. SEE TOP 100 is a unique ranking of the biggest companies in the region of Southeast Europe. This annual publication comprises: • SEE TOP 100 • SEE TOP 50 Banks • SEE Top 50 Per Capita • SEE Industrial • SEE IPOs • SEE Corporate Management • SEE TOP 100 CEOs List • SEE Country Profiles • SEE Best Employers • Analyses & Interviews If you are interested in obtaining a hard copy of the SEE TOP 100, Edition 2009, please e- mail us at consulting@seenews.com or call at +359 2 8012 610. The SEE TOP 100 ranking is also available on www.top100.seenews.com.
EU member state Bulgaria, traditionally a strong producer and exporter of metals, had nine companies represented in the ranking of the top 20 metals enterprises. This ranking was led by Romanian steel plant ArcelorMittal Galati with annual revenue of 2.23 billion euro in 2008, up 5.5% on the year. The ArcelorMittal steel group has four plants in Romania, located in Roman, Iasi, Hunedoara and Galati. The plant in Hunedoara ranked 17th, while another company belonging to the same group occupied the eighth place - ArcelorMittal d.o.o. Zenica in Bosnia and Herzegovina. Bulgarian copper smelter Aurubis was the second largest company with revenue of 1.3 billion euro in 2008, but it ended the year with a net loss of 86.4 million euro. Despite the global economic downturn and shrinking industrial production, most of the metals companies in the sub-ranking either raised their revenues compared to 2007 or in the worst case registered a minor decline. Four of them ended 2008 with a loss, the same number as in 2007.
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Methodology SEE Industry at a Glance represents a series of sub-rankings of the 20 biggest companies by total revenue within the top five industries in SEE TOP 100: Petroleum/Natural Gas, Electricity, Wholesale/Retail, Telecommunications and Metals. In order to make the ranking more comprehensive, we have looked beyond the 100 companies in our flagship ranking and expanded the scope to the entire pool of over 1,000 enterprises.
Company name
Country
Total revenue 2008
Total revenue 2007
Net Profit/Loss 2008
Net Profit/Loss 2007
1
Arcelormittal Galati SA
Romania
2,234.03
2,117.22
151.78
89.96
2
Aurubis Bulgaria AD
Bulgaria
1,308.50
1,128.27
-86.44
26.76
3
U.S. Steel Serbia DOO*
4
Alro SA
5 6
Serbia
967.06
907.05
4.91
28.16
Romania
614.92
626.85
62.04
120.84
Stomana Industry AD
Bulgaria
577.21
448.18
48.94
46.88
IMPOL d.o.o.
Slovenia
522.79
495.20
5.50
4.49
7
Acroni d.o.o.
Slovenia
445.24
469.91
20.81
32.43
8
Arcelormittal d.o.o. Zenica**
B and H
366.58
236.20
N/A
32.31
9
Sofia Med AD
Bulgaria
316.48
353.97
-28.76
-1.29
10
TALUM d.d.
Slovenia
310.00
361.95
0.36
9.16
11
Mechel Targoviste SA
Romania
304.13
230.56
26.68
7.23
12
Kremikovtzi AD
Bulgaria
285.07
683.54
-498.77
-23.34
13
KCM AD
Bulgaria
238.14
330.11
N/A
21.84
14
Mechel Campia Turzii SA
Romania
198.42
140.46
12.21
-7.75
15
Assarel Medet AD
Bulgaria
188.34
265.76
109.27
106.66
16
Tvornica Lakih Metala - TLM d.d.
Croatia
179.70
132.77
-5.14
70.46
17
Arcelormittal Hunedoara SA
Romania
164.49
212.19
0.55
-14.36
18
Hus OOD
Bulgaria
151.49
109.96
10.14
8.32
19
Alcomet AD
Bulgaria
113.59
128.79
0.57
1.92
20
Ekometal Engineering EOOD
Bulgaria
105.20
34.14
28.30
17.88
in m illions of euro (*) denotes net sales revenue (**) denotes net sales revenue for 2007
The metals sector in Southeastern Europe (SEE) went through the turbulence of restructuring in the post-Communist era in the 1990s and some of the largest metal ore mines and smelters found prosperity under foreign investors. The sector flourished until 2007, before the global economic downturn began.
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Steel and Base Metals SEE countries produce mainly steel, zinc, lead, copper and aluminium. The region’s biggest steelworks, smelters and refine ries are located in Bulgaria, Romania, Serbia and Slovenia. Bosnia’s metal industry has been picking up pace over the last five years.
Production of Metals by Country (in metric tonnes) Country Albania Chromium Copper Steel (crude) Steel (rolled)
Year 2007 2006 323570 210120 10000 100,000* 100000 115,000* 114000
Bosnia and Herzegovina Aluminium (Metal, ingot, primary and secondary) Steel (crude) Pig Iron Lead (metal, smelter, primary, secondary)
2007 147193 513867 60000 1
2006 136190 469122 60000 33
Bulgaria Aluminium (Metal, ingot, primary and secondary) Copper (ore gross weight) Copper (smelter) Copper (refined) Steel (crude) Pig Iron Lead (metal, refined, primary, secondary) Zinc (metal, refined, primary, secondary)
2007 12,800* 29674000 229100 69900 2,050* 1069 86956 99992
2006 12825 29572000 238500 65500 2124 1147 76028 95341
Croatia Aluminium (Metal, ingot, secondary) Steel (crude)
2007 2,500* 75,000*
2006 2457 80516
Macedonia Aluminium (Metal, ingot, primary and secondary) Copper (ore gross weight) Steel (crude) Nickel
2006 4000 4132000 326484 10900
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Country Montenegro Aluminium (Metal, ingot, primary) Steel (crude)
Year 2007 135151 173849
2006 121762 163165
Moldova Steel (crude)
2005 1000000
Romania Aluminium (Metal, ingot, primary and secondary) Copper (ore gross weight) Copper (smelter) Copper (refined) Steel (crude) Pig Iron Lead (metal, refined, primary, secondary) Zinc (metal, refined, primary, secondary)
2006 265000 12200 10 23581 6318000 3966 33100 43705
Serbia Copper (ore gross weight) Steel (crude) Pig Iron Lead (metal, refined, primary, secondary) Zinc (refined)
2007 6867000 1478000 1377478 700 -
2006 5775000 1837000 1529177 700 15000
2007 111016 638000 15000
2006 118100 627000 15000
Slovenia Aluminium (Metal, ingot, primary) Steel (crude) Zinc (refined, secondary) *Estimated figures Source: United States Geological Survey Mineral Resources Program
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Map: Concentration of Metals by Country
Country Albania Bosnia and Herzegovina Bulgaria Croatia Macedonia Montenegro Moldova Serbia Romania Slovenia
Type of Metal Cromium, Nickel Aluminium, Iron/Steel Lead/ Zinc, Copper Aluminium, Steel Copper, Lead/Zinc, Nickel Aluminium Steel, Copper Aluminium, Copper, Lead/Zinc, Iron/Steel Aluminium, Copper, Lead/Zinc, Iron/Steel Aluminium,Lead/Zinc, Steel
Source: Company websites
Crisis Deters Investment Falling prices of metals on international markets, suspended or delayed investment projects, and staff cuts dominated the sector at the end of 2008. Montenegrin aluminium giant KAP and Bulgarian steel mill Kremikovtzi amassed fresh debt and were headed for a closure. Serbia failed to find a buyer for its troubled copper mining and smelting company RTB Bor and in November it called on all creditors of the company to claim debt owed to them, totalling some USD 400 mln. Although most metal companies in SEE either halted or deeply cut production and laid off employees in the closing quarter of 2008, some allocated money to investment last year. They invested mainly in upgrades of their outdated equipment and in environmental projects.
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Announced Investments in the SEE Metals Sector in 2008 Company Stomana Industry AD (Bulgaria) U.S. Steel Serbia DOO (Serbia) ArcelorMittal Zenica d.o.o. (Bosnia and Herzegovina) Aluminij d.d. Mostar (Bosnia and Herzegovina) Alro SA Kurum International Sh.P.k. (Albania) Kremikovtzi AD (Bulgaria) Gorubso-Madan AD (Bulgaria)
Production line Galvanization line
EUR mln 79.40 69.00
Blast furnace modernisation
63.00
Anode factory Capacity upgrades Installation of shredder Rehabilitation of convector and electric furnace Capacity modernisations over 5 years
41.00 41.00 20.00 8.00 0.04
Project
Source: SeeNews
In Private Ownership Once pillars of the centrally planned Communist economies of SEE, nearly all leading metal companies in the region are in private ownership today. Governments throughout SEE have sought strategic partners for the privatisation of smelting and mining companies. The model used in the privatisation process was either a sale to a powerful foreign investor or an acquisition through management- employee buyout schemes, as was the case of Bulgaria’s KCM 2000 and Slovenia’s Impol 2000 d.d. Foreign investors had a significant role in the recovery of former state-owned enterprises in the SEE metals sector. Some of the world’s largest metal companies such as Duferco, Vimetco, U.S. Steel Corporation, ArcelorMittal and Norddeutsche Affinerie AG, have already entered the SEE market, replacing its outdated technologies with up-to- date know-how and equipment.
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Majority Owners of SEE Metal Companies
Company Olovno-Tzinkov Kompleks (OTZK) AD Makstil AD Acroni d.o.o. MTL - Tvornica Lakih Metala d.d. Alro SA U.S. Steel Serbia DOO Impol d.o.o. Talum d.d. Sofia Med AD Rudarsko-topionicarski basen Bor (RTB) d.o.o.
Country
Stake
Intertrust Holding BG AD Duferco Skop Investment Ltd. SIJ – Slovenska industrija jekla d.d. Concortium, led by Dalekovod d.d. Vimetco N.V. U.S. Steel Corporation Impol 2000 d.d. Elektro Slovenija d.o.o. Halcor SA Metal Works
89.86% 62.00% 100.00% 80.00% 84.19% 100.00% 97.50% 80.00% 99.90%
Serbia
Serbian government
100.00%
Stomana Industry AD Jelsingrad Livar Livnica Celika AD
Bulgaria B and H
Sidenor Steel Products Manufacturing Company SA Livar d.d.
100.00% 65.00%
Aluminij d.d. Mostar Kremikovtzi AD Kombinat za Cvetni Metali (KCM) AD ArcelorMittal Zenica d.o.o.
B and H Bulgaria
Government of Bosnia and Herzegovina Global Steel Holdings Ltd.
100.00% 71.00%
Bulgaria B and H
KCM 200 AD ArcelorMittal
94.50% 92.00%
Kurum International Sh.P.k. Aurubis Bulgaria AD (formerly known as Cumerio Med AD) Albanian Chrome Company (ACR) Sh.P.k Kombinat Aluminijuma Podgorica (KAP) AD
Bulgaria Macedonia Slovenia Croatia Romania Serbia Slovenia Slovenia Bulgaria
Majority Owner
Bulgaria
Kurum Demir Sanayi ve Ticaret Metalenerji AS Aurubis AG (formerlyNorddeutsche Affinerie AG)
Albania
A joint venture of Austrian-based trading company DCM DECOmetal GmbH and Russian firm OOO Terwingo
100.00%
Montenegro
Central European Aluminium Company (CEAC) Ltd.
58.73%
Albania
100.00% 99.77%
Selling in Europe All major SEE smelters and foundries export their output to European destinations. Germany, Austria, Italy, France and the Balkans are key markets for SEE metal companies, which generate a large part of their sales revenue.
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Long- term trade contracts and proximity to the Western European market are crucial for the choice of export destinations by metal companies in SEE. Global Metal Companies in SEE The privatisations and the subsequent restructuring in the SEE metals sector opened the way for an inflow of foreign investment much needed for the modernisation of outdated equipment and production technologies in SEE factories. Big regional companies like Sidenor Steel Products Manufacturing Company SA (Greece), Halcor SA Metal Works (Greece), SIJ – Slovenska industrija jekla d.d. (Slovenia) and Kurum Demir Sanayi ve Ticaret Metalenerji AS (Turkey) also bought metal production plants in SEE to strengthen their positions. Global and Big Regional Metal Companies Operating in SEE
Company Duferco SA (Belgium) Vimetco NV (the Netherlands) ArcelorMittal SA (Luxembourg) Aurubis AG (Germany) U.S. Steel Corporation (the USA) Sidenor Steel Products Manufacturing Company SA (Greece) Halcor SA Metal Works (Greece) Kurum Demir Sanayi ve Ticaret Metalenerji AS (Turkey) SIJ – Slovenska industrija jekla d.d. (Slovenia)
Operates in Macedonia Romania Bosnia and Herzegovina, Bulgaria, Romania Bulgaria Serbia Bulgaria, Macedonia Bulgaria, Romania, Serbia Albania Slovenia
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