This is because competition is much more powerful now, ArcelorMittal Galati chief executive Bruno Ribo said. He used Turkey (ArcelorMittal Galati’s main market in 2008) as an example, explaining that while in 2008 it was a net importer by 2011 it had turned into a net exporter. This is why the company is struggling to sell about two million tons of products a year.
ArcelorMittal Galati mainly produces heavy plates, and most of the output is exported, especially to Turkey. Whereas the company would produce 4.5 million to 5 million tons of steel a year, it is currently struggling to keep production at 2 million tons a year, which puts its annual revenue at around EUR1 billion.
The plant accounts for about 40% of the heavy plate production of the ArcelorMittal group, the world’s steel market leader.
It has no other way but to continue the restructuring program and speed it up, its chief executive said, adding that, according to Lakhsmi Mittal, the chairman and chief executive of ArcelorMittal, the market volatility will be the norm so that the company will have to find solutions to be more flexible and competitive.
The steel market plunged in 2009, causing the plant in Galati its highest loss ever in Romania, EUR334 million, while revenue shrank by more than 50% to EUR845.7 million.
The plant later cut its losses after a slight demand and price rebound. In 2010, it posted EUR984.6 million in revenue and EUR81.3 million in losses.
About 1,000 employees have left the plant in Galati in each of the last few years, and therefore only about 8,000 are still working there.
ArcelorMittal Galati last week announced completion of a EUR7 million investment in upgrading the adjustment shears at the heavy plates mill no. 2. The investment is part of a EUR25 million program to upgrade this mill and will reduce raw material consumption, boost efficiency and improve product quality.
(English version by Loredana Fratila-Cristescu)