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Kremikovtzi AD

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Kremikovtzi AD
Company typejoint-stock company
Industrymetalworking
Founded1963
Defunct2009
HeadquartersSofia, Bulgaria
Productscast iron, steel and others
Number of employees
6979
Websitehttp://www.kremikovtzi.com/
Entrance to Kremikovtzi AD

Kremikovtzi AD (Кремиковци АД) was Bulgaria's largest metalworking company. The construction of its facilities began on 5 November 1960 and the first production capacities were put into operation in 1963 to produce cast iron and coke, with production extending to cover other areas in the 1960s and 1970s. The company was privatised in 1999, 71% of it was acquired by a Bulgarian owned company — Daru Metals (later to change its name to Finmetals Holdings). In 2005 Valentin Zahariev and Kiril Zahariev sold 100% of Finmetals Holdings for US$110 million to Global Steel Holdings Limited (GSHL), owned by Pramod Mittal, brother of the highly successful Lakshmi Mittal. Kremikovtzi is not related to the Arcelor Mittal group.

The new management brought by the Global Steel Holdings Limited has embarked on an investment program aiming to increase the product quality, reduce the production costs and widen the product range. The key focus of this was the finalisation of the new Continuous Caster and a new Converter; both of these were finally put in full operation in November 2006, after being under construction for more than 15 years.

Most of Kremikovtzi AD's production was exported to the European Union, Turkey, some of the former Yugoslav countries, the United States and China. The profit was 120 million leva in 2003 and 80 million leva in 2004. However, bad management and other factors led to the company generating losses of more than BGN 200 million for 2005.

Kremikovtzi AD acquired 70% of the LEMIND-FPL polyester-covered sheet iron factory in Leskovac, Serbia in January 2005, for €1.4 million. The company also made another acquisition in April 2005, purchasing the Llamkos galvanised sheet iron factory in Vucitrn, Kosovo for €4.15 million. Both plants were disposed of upon Kremikovtzi's takeover by GSHL.

In November 2006, the debt obligations of the company were subject to extreme price volatility as speculation mounted about the depth of commitment to the business by GHSL. Pramod Mittal, the company's owner, issued a statement to reassure investors of his ongoing interest in Kremikovtzi's success; but this was not sufficient to dampen the ongoing volatility of the debt price. At the beginning of December 2006, GSHL issued another statement, this time committing to inject cash into the business on an ongoing, quarterly basis.

Decline and shutdown of production

Mittal withdrew from the company a year or so later, and since then the company is being kept afloat by the socialist government, desperately seeking for a potential investor. All negotiations ultimately failed, but fuel and salaries were not being paid during that period, creating additional debts for the company.

Since December 2008 the factory is virtually non-functioning, kept in a safe-standby mode.

On May 15, 2009, the coke production plant - one of the most controversial symbols of the company - has been shut down permamently.

Gas supply (main fuel for the factory's operations) has been cut off, although it can be restored. The fate of the company is unknown, but prospects are gloomy.

The factory is now destroyed and only few of the facilities that can work are renovated and ready to start work again.

Krtemikovtsi AD - panoramic view
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