A Eu20mn EBRD loan to Celsa Huta Ostrowiec should contribute to the revitalisation of a company which only a year ago was facing grave difficulties. It now stands a good chance for a strong revival and to participate more effectively in the major infrastructure improvements that are expected to follow Poland’s recent accession to the EU.
Huta Ostrowiec was bought in 2003 by Compania Espanola de Laminacion (Celsa) of Spain. Since then its performance has improved significantly. Annual production, mostly reinforcing bars, is being restored to its previous level. The main market for the mill is the construction industry, but it also has a sizeable forging operation, producing shafts for the European marine and power industries.
While the first restructuring measures have started to bring results, the EBRD loan will finance investments in the production facilities to raise quality and productivity standards and strengthen the company’s competitive position. It will also improve customer services (e.g. direct deliveries within 24 hours), widen the product range and create a logistical department.
EBRD President Jean Lemierre says the agreement demonstrates the bank’s commitment to the restructuring of Poland’s industry. By providing the loan, the EBRD hopes soon to attract followers.
Francisco Rubiralta, chairman and CEO of Celsa, believes that Poland will enjoy in the next years a similar economic growth as Spain experienced after its accession to the EU in 1986.
Celsa started in 1967 in Barcelona as a small reinforcing bar re-rolling mill. Following acquisitions and strong organic growth, the privately owned Celsa Group today is one of the largest long products producers in Europe, with forecasted sales of Eu3bn and 7mn tonnes of finished steel products sold in 2004.
Celsa has recently taken over the assets of Allied Steel & Wire in Wales and achieved the turnaround of the company.