ArcelorMittal Skopje - Working Capital and Capex

Location:

FYR Macedonia

Project number:

35402

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

26 Jul 2005

Status:

Completed

PSD disclosed:

24 Jun 2005

Project Description

The proposed project is for working capital and energy efficiency investments at Mittal Steel Skopje. This will enable the client to develop this business based on purchasing semi-finished intermediate steel products for re-rolling. The energy efficiency measures will consist of the purchase and the installation of steam boilers and the switch from oil firing to natural gas in the hot-rolling mill.

Transition Impact

Sources of transition impact would be:

  • Restructuring
    Mittal Steel has a proven track record of significantly improving within a short period of time the operational practices at poorly performing plants. Mittal Steel maintains for all its operations a Knowledge Integration Programme which enables Mittal Steel managers to share best practice management experience between plants belonging to the group. This will facilitate knowledge transfer to the local economy. A further element would be the energy efficiency measures which would help to reduce the energy intensity of the operations
     
  • Corporate governance
    The rolling mills are now majority owned by Mittal Steel, one of the major players in the global steel industry. Mittal Steel will introduce international accounting standards (US GAAP), introduce an environmental action plan and will generally take measures to improve practices on the procurement and sales sides.

The Client

Mittal Steel Skopje, a company which majority owns a hot-rolling and a cold-rolling plant producing steel hot and cold rolled coils as well as galvanised and prepainted steel. The Company is 100% owned by Mittal Steel Company N.V. which has recently become the largest steel company in the world with sales of USD 31.2 billion and steel shipments of 58 million tonnes in 2004.

EBRD Finance

Loan, EUR 25 million.

Project Cost

EUR 25 million.

Environmental Impact

The environmental due diligence, undertaken by independent consultants, has not revealed any significant environmental problems. However, there were a number of issues which had to be mitigated by the implementation of the agreed Environmental Action Plan (e. g. upgrading waste water treatment and water management systems, investments to improve hazardous and industrial waste management and storage, improvements to occupational health and safety management and training). These actions help to bring the company into full compliance with national requirements and achieve a higher degree of compliance with applicable EU standards. A part of the loan was spent on energy efficiency investments which also had significant environmental and health and safety benefits (e. g. pickling line refurbishment, reheating furnace fuel switch). The implementation of the EAP is monitored by the Bank.

As of April 2009, the following progress has been made on the EAP: The Environmental Management System was certified according to ISO 14001 in October 2008, the company implemented chromium-free surface treatment and plans to have its health and safety management system certified in 2009. The company is implementing a solid waste management system. Delays have occurred in upgrading the wastewater treatment plant, which is shared with other companies; however, this will completed by 2011. In May 2009 the Company received three Corporate Social Responsibility Awards from the Ministry of Economy for its contribution in the domain of environment, relations with employees and investment in the community.

Technical Cooperation

An energy efficiency audit has been performed which was financed under an existing framework contract, funded by the CEI, Central European Initiative (Italy).

Company Contact

Mr Rajiv Bhatnagar

Mittal Steel Skopje

Tel: +389 2 3288 200.

 

Business opportunities

For business opportunities or procurement, contact the client company.

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