On January 22, beleaguered steel plant Kremikovtzi rejected Bulgarian-language media reports that it is to be sold.
The plant, the country’s biggest steel processing factory, is under fire from several quarters. Environment Minister Djevdet Chakurov said on January 19 that it could lose its operating permit if it failed to fulfil the air pollution limits set by the ministry. Sofia mayor Boiko Borissov has been insisting for some months that the plant, widely seen as the city’s worst polluter, should be closed to make way for a large-scale business centre. Employees have alleged that their pay regularly is late by two to three months. One worker told The Sofia Echo that “repairs” to ageing machinery had been literally no more than cosmetic, with paint being used to conceal the deteriorating state of the equipment.
Further, there are meant to be public hearings and discussions on the future of the plant. Sofia municipality is in charge of setting the date for these hearings. Chakurov told national commercial television station bTV on January 19 that Sofia residents should be fully aware of the pollution caused by the plant. Kremikovtzi currently regularly is fined for exceeding air pollution norms.
On January 16, Bulgarian-language daily Standart quoted Kremikovtzi executive director Alexander Tomov as having said the previous day that the plant was to be sold. According to the newspaper, Kremikovtzi owner Pramod Mittal and consultants Global Steel were considering a selling price, which could reach 500 million euro. Standart said that several Ukrainian oligarchs were interested in buying the plant. These were said to include the owner of Finance and Credit Group, who is close to Ukrainian president Victor Yushchenko. Another possible purchaser, reportedly, was metallurgical firm Metinvest Holding, owned by Rinat Akhmetov, who is seen as close to former Ukrainian prime minister Viktor Yanukovych. Standart quoted Bulgaria’s Deputy Economy Minister Nina Radeva, who represents the state’s 25.3 per cent shareholding in Kremikovtzi, as saying that a Russian company was also interested in the steel mill. Radeva was quoted as saying that Global Steel had not announced officially the number of candidate purchasers or the asking price.
Kremikovtzi spokesperson Roumen Zankov told The Sofia Echo that Standart’s report was mere speculation.
“No member of the company management, including executive director Alexander Tomov, has made any such statement on selling the plant or on a possible price or valuation of assets.”
Tomov said: “The management has said several times, and there is nothing new and sensational, that many companies are showing interest in the steel company Kremikovtzi AD.”
Kremikovtzi’s board of directors also rejected various statements and allegations made by trade unions about the plant, although it endorsed unions’ opposition to the plant being closed.
The Metallurgic Federation said that closing the plant would mean 100 000 people would be unemployed. Quoted by Bulgarian-language daily Monitor, labour federation Podkrepa said that it would demand 100 000 leva compensation for each employee. Podkrepa said that closure would seriously impede the operations of, among others, Bulgarian State Railways, the ports of Lom and Bourgas and the National Electricity Company. The labour federation said in a letter to top office-bearers including Prime Minister Sergei Stanishev that workers were prepared to strike in support of their demands, including by blocking for six months the traffic arteries in and out of Sofia. Podkrepa called on the Government to guarantee that the plant would not be closed.
Tomov confirmed that the plant’s environmental programme had been delayed but said that the plant was working on it. He said that in 2007, of the 55 million leva invested in the plant, 17 million had gone to projects related to environmental issues. Of the 160 million leva investment planned for 2008, 94 million leva were for environmental projects.
Kremikovtzi said the campaign to close it was linked to “economic interests” and was causing instability among employees and the plant’s partners, and was impeding normal production and trading.
It rejected allegations that employees were paid late.
“Up to today (January 15) there are no unpaid salaries at Kremikovtzi.” However, it said that a delay in the most recent round of pay and some social payments would be dealt with soon. Kremikovtzi said in the past two years, the average salary of employees, excluding management, had risen by 47 per cent to reach 500 euro in December 2007.
It said that in spite of continuous increases in prices of transport, energy and gas, as well as restructuring of production and management, the company regularly paid what was due to the state.
At a rally attended by thousands on January 23, representatives of the Confederation of Independent Trade Unions in Bulgaria (CITUB) and Podkrepa demanded that Stanishev remove Global Steel from the management of Kremikovtzi Steelworks.
Global Steel was an unwelcome investor because it did not carry out the investment plan for the mill, Vassil Yanachkov, chair of the trade union Metalicy, told the rally.
The unions called for the dismissal of five deputy ministers, including Deputy Economy and Energy Minister Nina Radeva. The five were assigned the supervision and completion of the investment plan for Kremikovtzi, BTA said.
Workers said that they still had not received their December salaries.
If the Cabinet would not meet the demands of the unions, a rally would be held in Sofia to demand it to step down.
