Business News

Steel Group Inaugurates New Production Line

Jesenice, 11 November (STA) - SIJ, the Slovenian steel group owned by Russian group KOKS, inaugurated a EUR 28.5m production line at its subsidiary Acroni Jesenice on Thursday. Company officials said the new line will help boost productivity at the group.

While the new production line has been operational since the summer, it was officially presented to the public today. Acroni has already achieved new output records since its launch.

Acroni general manager Simon Kanalec said the new production line is part of the company's focus on developing new products and enhancing quality.

He said that with the help of new the production line, the company has gradually seen its output rise to record levels, even better than that from the boom of 2008.

Kanalec expects Acroni to generate revenues of EUR 430m this year with output of 320,000 tonnes, although he does not expect it to make a profit yet. The SIJ group will, however, will end the year in the black.

Acroni expects to complete another major investment next year, when it is scheduled to launch a EUR 42m sheet rolling machine.

Kanalec explained that the company's focus is on increasing productivity. It has managed to increase its output despite constant cuts in staff - the company has seen its workforce cut from 1,560 in 2008 to 1,400 this year.

New investments are aimed at increasing automation at the group which will invest a total of EUR 58m this year. The new rolling line will create only three new jobs.

"We are convinced that only high technology and better efficiency are a guarantee for a quicker recovery," said SIJ chairman Tibor Simonka.

Simonka said that SIJ is expected to finish the year with a profit of EUR 2-4m, which should increase to as much as EUR 25m next year. In 2009 its loss amounted to EUR 27m.

SIJ expects sales volumes to rise by 15% and revenues to increase by 27% to EUR 700m next year.

Moreover, Simonka said that SIJ should exceed 500,000 tonnes of output for the first time since 1991 next year. Back then the companies in the group employed 14,000 people; the current workforce stands at 3,157.

The strong outlook for the group was hailed by the representative of KOKS Andrei Zubitskiy, who presides of the SIJ supervisors board, and Economy Minister Darja Radic.

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