OFZ, producer of ferroalloys (source: TASR )
The ferro-alloy manufacturer OFZ, based Oravský Podzámok, Žilina Region, plans to move almost half its production from Slovakia to Uzbekistan. The reason is insufficient state support for energy-intensive companies, which makes the company less competitive. The company visited different countries for a year, seeking a suitable destination for its production.
“We have decided to relocate part of our production outside the European Union,” Branislav Klocok, OFZ’s director general, said in an interview with the Hospodárske Noviny daily on Monday, July 10. “If we succeed with our plans, we will start relocating the first furnace and we plan to start production there in October.”
India, Egypt, Bosnia and Herzegovina, Brazil, Azerbaijan were among the final choices, but Uzbekistan is the top candidate.
“We assume that the electricity in Uzbekistan will be about five times lower than the current price we pay in Slovakia,” said Klocok as cited by the the Denník N daily.
Penetration into the local market is to be carried out with the helping hand of the local partner Uz-Shindong Silicon, which started the production of ferroalloys in 2010.
Due to high energy prices, OFZ has already ousted 200 people and kept the last hundred. The company also interrupted production for 10 months.
Economy Ministry has not offered helping hand
The Economy Ministry does not plan to negotiate with OFZ and reverse the relocation with any special assistance, in addition to what it already prepared for the domestic industry earlier. The ministry also points out that OFZ was loss-making before last year’s extraordinary increase in energy prices, the Denník N daily writes.
“It should be noted that OFZ has been loss-making a total of three times in the last five years - in 2019, 2020 and 2022 - that is, even before the energy crisis itself,” the ministry claims as cited by Denník N.
At the same time, the company has ended up with a cumulative profit of more than several million euros the past five years. This was thanks to the exceptionally high ferroalloy prices of the year before last, which pushed its profit to over €15 million euros at the time, the daily noted.
Employers see Slovak and European industries in danger
The National Union of Employers (RÚZ) claims that industry in Slovakia and Europe is endangered. They noted that the reason for the decline of the industry, in addition to increased prices, is an unreasonable focus on green transition and decarbonisation.
“After 70 years, the oldest industrial company on Orava is moving part of its production to Asia,” RÚZ wrote on social networks. “Relocation is the last hope - at least this is how the company wants to keep up with foreign factories, which in many respects have more favourable conditions for doing business than domestic ones.”
RÚZ general secretary Martin Hošták added that squeezing out companies from Slovakia is a loss for the country, its people, as well as the state.
“If we continue to push this, such things will happen more frequently,” he said as cited by the SITA newswire. “The Slovak economy will be shaken to its foundations.”
Employers see the solution to maintaining production in the form of assistance through the EU’s Recovery and Resilience Plan, the modernisation or environmental fund, as well as slowing the green transition.
