BUSINESS BRIEFS

Steel firm cutting production

Slovakia's largest steel company, US Steel Košice, has said it will be cutting back production from December 22 this year until January 7, 2002 and encouraging an unspecified number of employees to take holidays over the period.

US Steel Košice spokesman Jozef Marko said the cuts were a result of a global downturn on steel markets that began in the United States.

"The steel market is saturated, and a deep US recession has moved to Europe and affected us," he said. He added he could not specify to what extent the eastern Slovak firm's output would be affected.

Some of US Steel Košice's European customer nations were protecting their markets "by giving contracts to their own steel-makers" he said.

"We don't want to have to warehouse our production, so we have to make cuts. With the production orders we now have we cannot run production at 100%."

In an interview with The Slovak Spectator November 6 the firm's president, John Goodish, estimated the steel glut on world markets to be between 125 and 150 million metric tonnes, "depending on whose figures you use."

"We've had a significant drop in pricing, more than we anticipated, and we may revive some of our investment opportunities as a result. Not that we are going to cut back, but we will reallocate production into areas where we know there is demand today," he said.

Goodish cited as a growth prospect the central European market for electrical sheets, and said the firm would be moving production towards such added value products away from commodity hot rolled and cold rolled grades.

"We are reallocating our business strategy to what we see going on in the marketplace."

Regarding staff cuts, US Steel Košice is bound by an agreement that it signed with the government in a 2000 purchase deal for its predecessor, VSŽ, to keep employment stable. Marko said he could not say how many employees would be "affected by the reduction in production".

Commenting on the firm's employment and capital investment promises Goodish said: "We intend to live up to our obligations."

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