The Competition Council has launched a probe into the Romanian business of Indian billionaire Lakshmi Mittal, who owns several steel plants in the country, because of a potential economic concentration and exercising of a dominant position over Comvex Constanta (CMVX), where the Indians own a controlling interest.
"If ArcelorMittal Galati is found to have conducted an economic concentration operation without notifying the Competition Council, it is liable for penalty for failure to notify, which may reach as much as 1% of turnover," said Bogdan Chiritoiu, Competition Council chairman.
The plant in Galati (formerly Sidex) posted 1.95 billion-euro turnover last year.
ArcelorMittal has recently decided to stop working with Comvex, held by two businessmen in Constanta, preferring to have its raw material shipped through a harbour in Bulgaria.
The decision of the Indians was fiercely criticised by the representatives of the National Maritime Harbour Management Company (Compania Nationala Administratia Porturilor Maritime - CNAPM), National Navigable Channel Management Company (Compania Nationala Administratia Canalelor Navigabile - CNACN) and Comvex, all of them based in Constanta, which accused ArcelorMittal of dealing an unfair blow to the local companies that were dependent on it. ArcelorMittal used to contribute over 50% of Comvex’s business, which stood at 41.3 million euros, and the ArcelorMittal plant in Galati accounted for about 58% of the traffic on the Danube-Black Sea Canal. Billionaire Mittal bought the plant in Galati in a 50 million-dollar deal eight years ago. The acquisition benefited from the political support of Prime Ministers Adrian Nastase and Tony Blair (UK, as Lakshmi Mittal is also a British citizen). Soon after the Indians took over, the plant in Galati which was losing one million dollars a day when managed by the state, started making profit. Once a black hole, Sidex has posted $884 million (678 million euros) in profit since takeover.
ArcelorMittal Galati, Romania’s leading exporter, sold 794,000 tonnes of steel in the first half, down 56.1% since the corresponding period of last year, according to information supplied by the company to the Economy Ministry.
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