Bruno Ribo took the reins of the plant less than four months ago and has clearly defined goals for his term: work safety, quality assurance for the operations and services provided to customers in a completely different economy than it was three years ago, and improving efficiency, along with a reduction in costs, which the company plans to attain by continuing to invest in higher-performance equipment.
Work safety is a general policy for the entire group, Ribo said.
The former Sidex (now ArcelorMittal Galati) had 10 to 15 deaths caused by work accidents every year in the ’80s and the ’90s, writes BUSINESS Magazin. Last year, the number of work accidents stood at 12 with no deaths, making 2011 the best year in the entire history of the plant in this regard.
The second goal is quality assurance for the products and services delivered to customers. The third goal of Ribo’s term is boosting efficiency along with a reduction in costs. To do that the plant is investing in better equipment and has lowered the number of hierarchy levels to improve cooperation among departments.
The world economic crisis made a powerful impact on the steel market, a basic raw material, therefore an economic indicator. Ribo says that when the economy falls, so does the steel market.
ArcelorMittal Galati sells one third of its output in Romania, one third to Turkey and the rest to European and Middle Eastern countries.
Ribo says the markets around the Black Sea have completely changed since 2008 and the plant has been going through a transformation since 2009, focusing on the core business and protecting its slice of the market this way in a difficult global economy.
Turkey is becoming industrialized quite fast, but it is a country four times the size of Romania, Bruno Ribo said. Competition in Turkey is high and is starting to influence Romania, as well, yet the country is a massive exporter and if the market in Europe shrinks, then the whole chain is affected. The year 2013 will not be any better than 2012 in Europe in terms of orders, so that ArcelorMittal Galati is trying to cope in this competitive environment, its chief executive said.
ArcelorMittal Galati has not published its financial results for last year, but Ribo says losses were significant, especially in the last quarter. The first quarter was about as bad as the last quarter of 2011, while the second quarter of 2012, though somewhat better than the first still is not looking good.
The company posted losses because it had to buy electricity from sources other than its traditional supplier, Hidroelectrica, and because of the harsh winter, which caused the Danube to freeze (the plant delivers 75% of its production by ship over the Danube).
ArcelorMittal Galati has invested about EUR500 million over the last six years. The latest investment was conducted in furnace no. 5 last year and was worth EUR80 million.
The company expects the new furnace to help boost its business, because of its capacity of two million tons of steel a year, and will invest in “sustainability,” Bruno Ribo said. At the same time the number of employees will continue to go down, because that is what the plant needs.
ArcelorMittal Galati’s CEO says a worker in the most efficient plants in Europe produces four times as much as a Romanian worker, but some of the differences are structural in nature and cannot be corrected.
The company is working on those differences that are not structural and cannot raise wages because of the difficult world economy. The good days of the past will not be back. The company is still successful in some ways, such as work safety, services for its customers and does better in terms of costs than it did in 2008, Bruno Ribo said.
(English version by Loredana Fratila-Cristescu)