When the Indians from LNM Holdings bought Romanian steel mill Sidex Galati in 2001, they set out to make profit by 2003. Although it was thought to be an unrealistic goal at that time, as Sidex was reporting annual losses worth several million dollars, the target no longer seems so difficult to achieve. New managers have radically restructured the mill's operations, so that the gross profit posted by the company in H1, 2003 already amounts to 97.8 million dollars.
As a comparison, the losses in 2001 accounted for $462 million, while last year's losses were worth $22 million.
The company saw profit as turnover increased, from $440 million (14,638bn ROL) in the first half last year, to $592.4 million (19,373bn ROL).
Ispat Sidex managers could not be reached for comment upon the evolution of the company. However, several months ago, Sidex general manager Narenda Chaudhary said the improved financial situation would come as a result of a considerable output increase (up to 25%), much tighter trading and supply regulations, and after cutting some specific costs, including power costs.
Also, Ispat Sidex laid off some 8,000 people, so that the workforce was reduced to 19,000 employees, which brought the wages, insurance and social security spending down to about 20 million dollars.
Sidex managed to pay $155 million to its clients last year, as part of the debt LNM Holdings took over under the privatisation deal, and sold most of the output through its own network, replacing trading companies.
The steel mill's average monthly output went up from 260,000 tonnes in 2001, to 375,000 tonnes in 2002. Moreover, monthly sales on the domestic market averaged 72,000 tonnes last year, whereas the company traded 50,000 tonnes per month in 2001. Monthly exports also increased, from 174,000 tonnes in 2001, to 250,000 tonnes in 2002. laurentiu.ispir@zf.ro
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