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Bulgaria steel mill Kremikovtzi might close down in October

Date: 26.06.2008

The Chair of the Metallurgy Federation at the Podkrepa Labor Confederation Lyudmil Pavlov said Tuesday that the Kremikovtzi steel-maker would likely be closed down in October 2008.

The arguments for his prediction include the lack of state protection of the factory, the insufficient funds for the purchase of raw materials and for the payment of wages, and the possibility that the plant might not get a complex permit from the Ministry of Environment before the fall.

Pavlov stated that if the factory was closed, some 80-100 000 people might lose their jobs apparently meaning not only Kremikovtzi's ten thousand workers but also people employed in the transportation and other related sectors.

The trade union leader said that the problem with the troubled steel-maker could be resolved by finding a new owner not by declaring it bankrupt.

The Podkrepa Labor Confederation representatives suggest that the government should hold an open tender, in which the three candidates for the purchase of the plant could bid for it, namely the Ukrainian Vorskla Steel owned by Konstantin Zhevago, the Indian ArcelorMittal of Lakshmi Mittal, and the Indian Assar Steel.

The syndicates pointed out that the strongest candidate of the three was ArcelorMittal but that its intentions were dubious because it wanted to buy the plant after it was declared bankrupt.

"Whoever acquires the plant, they must know that they would have to invest in environmental protection measures", Pavlov said adding that the workers still had not received they May salaries.

The trade unionist contrasted the situation now when Kremikovtzi's production was 40 000 tons per month to the 1994 levels when the plant operated at full capacity, and its output totaled 160 000 tons per month. He was positive that if the plant had good management and a steady supply of raw materials it could manufacture up to 3 million tons of products per year.

However, the Podkrepa unionists insist that this would become possible only if the state detained and punished those responsible for the draining of BGN 1,5 B from the plant.

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