Mechel OAO, one of the leading Russian mining and metals companies, reports compliance of its Romanian steel subsidiaries with the viability benchmarks established by the European Commission within the framework of the Romanian steel industry restructuring strategy.
The European Commission monitored Mechel Targoviste and Mechel Campia Turzii in the period from 2004 to 2008, as soon as state aid was granted for both plants in the course of privatisation.
The state aid was provided in the way of writing-off the plant’s historical debts. The Commission monitored certain parameters of the companies’ activity, including labour efficiency, reduction of materials consumption, manpower optimisation, modernisation of production facilities, and compliance with the EU environmental standards.
The European Commission’s final report has confirmed compliance of Mechel Targoviste and Mechel Campia Turzii with all the key benchmarks required.
Mechel invested over US$100M in the two plants between 2004 and 2008 which is 1.5 times above the level of investments specified by the EU.
Owing to the world financial crisis performance in 2008 was worse than had been expected but Mechel plan to reach the pre-crisis production levels by the end of 2010.
The modernisation programme will continue, the main aim of which is to implement new technologies in steelmaking and rolling and increase the output of higher value-added products.