Mittal Steel: At capacity, our production reaches 3bn euros

Mittal Steel Galati (the former Sidex) steel plant is expected to overshoot the 2 billion-euro turnover mark this year, although it is only operating at two thirds of its capacity, this way rebounding from a slow 2006.
Sidex is one of the top three companies in Romania after Petrom and Lukoil, with the performance of the plant influencing many businesses.
“At capacity, we should exceed 3 billion euros,” Augustine Kochuparampil, CEO of Mittal Steel Galati told ZIARUL FINANCIAR in an interview.
He says that like the Arcelor Mittal group it is part of, the plant in Galati has benefited from a favourable market in the first half of this year, with rising demand and higher prices.
“With help from the sales offices in the West we were able to sell our products more easily in the first part of the year and achieve better operational results.
We sold 10% more than we produced in the first quarter because demand was very high, with the second quarter looking equally good.
Under the circumstances, we believe we can overshoot the 2 billion-euro mark,” Kochuparampil says.
Mittal Steel Galati posted a 1.72 billion euro turnover last year, slightly down from 2005, and a net profit worth 47.3 million euros, compared with 44 million euro losses in the previous year.
The company’s CEO expects the steel market in Romania to increase by 7 or 8% this year and predicts a very good performance both for Eastern Europe and globally.
The strategy of the Arcelor Mittal Group for the plant in Galati will be to turn it into a centre of excellence for the production of thick sheet metal, used in the manufacturing of gas and petroleum ducts, in the shipbuilding and automotive manufacturing sector and in the construction of windmills and pressurised containers.
“The plant in Galati is one of the production centres owned by the group that is not currently used at capacity. In theory, the plant’s production capacity stands at 8 million tonnes of liquid steel, yet it is only operating at two thirds of its capacity right now.
We want the investments we make to enable us to reach 90-95% capacity,” Kochuparampil added.
To achieve this target, investments worth more than 300 million dollars are required, 120 million dollars (more than 75 million euros) of which are scheduled for this year.
As far as environmental issues are concerned, Mittal Steel Galati’s top man says that 13 projects are now in progress and they will be completed by the end of 2008. The projects are worth a total of 50 million dollars (37 million euros).
“We are working with the Environmental Authority to rally to European standards by 2014. In this regard, we will finalise the list of environmental projects over the next few weeks. Ours is a two-way strategy: we are making sure all the new installations use the latest technology and we are also investing in the other pieces of equipment to bring them in line with European environmental standards,” says Kochuparampil.