Slovakia's largest aluminium smelter, Slovalco a.s., is considering expanding its capacity to 144,000 tonnes per year from the current 108,000, Slovalco said at an international investment conference in Bratislava on February 19.
Slovalco expects to produce 110,000 tonnes of aluminium in 1999, after producing the same amount, which exceeds its official capacity, in 1997 and 1998.
"As of now it is technically clear how and what is to be done, now we have to negotiate with banks," Slovalco's administrative director Milan Veselý told Reuters. "The whole investment is about $80 million...It is quite cheap," he added.
Veselý said all shareholders were in favour of the expansion and the management has been given the go-ahead to exploring financing possibilities. "The final decision should be made this year, we should begin construction in 2000 and it should be finished by 2001," he added.
Slovalco was hoping to get financing on at least as favourable terms as the syndicated restructuring loan it received in November 1998. The five-year $126 million facility arranged by the European Bank for Reconstruction and Development (EBRD) and Credit Lyonnais was priced at 200 basis points above LIBOR.
Slovalco is 80% owned by Slovak aluminium firm ZSNP. The EBRD and Norsk Hydro hold 10% each.
According to Slovak accounting standards, Slovalco posted an after-tax loss of 68 million crowns ($1.75 million) on revenues of 8.1 billion crowns in 1998. Slovalco said 1998 results according to international standards will be published in mid-March.
In 1998, Slovalco chalked up a 0.53/1 import to export ratio as the European Union took $195 million of annual sales of $220 million.
Established in 1994, Slovalco currently employs 710 people.
1. Mar 1999 at 0:00 | Reuters