Bulgarian Steel Mill 'Stomana' shows sings of growth

Bulgarian Steel Mill 'Stomana' shows sings of growth

In October, Bulgaria's largest operational steel-maker Stomana Industry re-hired 100 metallurgy workers. The plant based in the city of Pernik is starting to regain the jobs it had to shed as the economic crisis kicked in. Back in November 2008, the company owned by the Greek Tempo Metal laid off about 300 workers. Stomana Industry is now the largest Bulgarians steel-maker in operation, after the Kremikovtzi plant in Sofia, which is the only larger one, has run into bankruptcy.

In November, it became clear that after the 2009 collapse, Bulgaria's metallurgical industry has started to make a comeback with growth of 3.7% in the first nine months of 2010 year-on-year.

Thus, in January-September 2010, the Bulgarian metallurgical plants produced a total of 562 100 tonnes of steel. The production of non-ferrous metals has also started to grow, though by an even smaller share, according to data of the Bulgarian Association of the Metallurgical Industry (BAMI). BAMI forecasts that Bulgaria's 2010 steel production will surpass the 2009 output.

Yet, even though the Bulgarian metallurgical sector started growing again, its growth is very modest, and it is far from reaching the pre-crisis level after the 2009 collapse by some 50%, according to Politimi Paunova, BAMI Director. Paunova believes that Bulgaria has the pontetial to become a hub for the production of non-ferrous metals. As far as the steel-production is concerned, in her words, if the Kremikovtzi steel-maker does not recover and start production again, Bulgaria will become a net importer of steel.

In July, Austrian company Voestalpine said it may be considering Bulgaria again as a potential investment destination in 1-2 years. The decision of the Austrian steel giant Voestalpine AG to make a large-scale investment in a new steel plant in the Black Sea region is still up in the air. Voestalpine announced in early 2008 that it planned to invest EUR 5 B in the building of a steel plant in either Bulgaria, Romania, Turkey or Ukraine.