“The problem is not the production capacity. The question is whether energy prices will allow us to be competitive. Energy price pressure exists everywhere and will continue to increase. Before the Revolution, IMGB used to produce 130,000 tons of liquid steel annually. This year, production will reach 90,000 tons, compared to 76,000 tons last year,” said Florin Antonescu, managing director of Doosan IMGB.
Company representatives said production is supported by energy and mining equipment demand, while orders on the navy segment continued to fall.
“We registered operating profit in the first nine months. We shall see how things will develop by the end of the year, considering electricity prices. Energy prices impact us severely, as energy represents about 20% of the product’s final price. On the ferroalloy segment prices fell over the past months, which is an ill omen announcing the prolonging of the crisis,” said Antonescu.
The Association of Energy Utilities (ACUE) said last month the natural gas and electricity tariffs for industrial consumers might be increased two digits in the last quarter of the year or in the first quarter of 2012. Romanian authorities pledged during negotiations with the International Monetary Fund and the European Commission to deregulate tariffs for the energy sector by 2015.
Despite turnover increases, Doosan failed to post profit.
In 2010, Doosan registered turnover of EUR78.7 million and losses of EUR9.5 million euro, up 14.4% compared to the loss reported in 2009.
The company is ranked second on the local heavy equipment market. Its main competitor is Grup Romet Buzau, owned by Romanian businessman Constantin Toma.
“Last year we invested about EUR10 million mainly in a steam station for the steel mill and investments might rise to EUR3 million this year,” said Antonescu.
Doosan IMGB employs 670 people, compared with 692 workers at the end of last year.
(English version by Ioana Tudor)