Aluminum Plant sold, 420 workers fired

Aluminum Plant sold, 420 workers fired

 

By Adnan Prekic – Podgorica

After two tenders, once the largest factory in Montenegro, now in bankruptcy – the Podgorica Aluminium Plant (KAP) was sold for 28 million euros to the Montenegrin company Uniprom. In the factory, which once employed thousands of workers, now only work 720 employees, most of which will be fired because the new owner plans to keep only 300 workers. What will be the fate of the company depends on whether the new owner will find the way to provide cheap electricity for the production of raw aluminum or else raw materials will be imported, after which a small number of workers will only produce a final product. The new owner plans to lead strategic investor to the factory. It has already been announced that it could be the turkish company “Sahinler”, the largest aluminum producer in Turkey.

The bankruptcy trustee of Aluminum Combine, Veselin Perisic and the owner of Uniprom, Veselin Pejovic, signed a contract (photo) for the purchase of the property of KAP, worth 28 million euros. The KAP currently has about 720 employees, but the new owner plans from July 1, when he officially takes over the factory, to employ only 300 worker.

The new owner asked earlier from the Electric Power Industry of Montenegro to grant him the electricity price offrom 38 euros per megawatt-hour. If that happens he plans to keep the production of raw aluminum. This is not realistic however, since the Italian company A2A, which is comprised by co-owned energy enterprises, requested that the price of electricity be 45 euros per megawatt-hour. If they do not get the asking price, Pejovic plans to find a price of 38 euros per megawatt-hour on the international market. The new owner announced that if no agreement is reached for the wanted price of electricity, he will suspend production of raw aluminum. In this scenario, raw aluminum would be imported, the factory will only produce the final products and employ only 150 workers.

Pejovic plans to organize manufacture in the KAP with the help of strategic partners. He confirmed that he has already registered the company as “KAP Uniprom – Sahinler”, whose main activity will be the production of aluminum. This could be the announcement that the Turkish company “Sahinler”, which is the largest aluminum producer in this country, will appear as a strategic partner for KAP.

In 2005, the montenegrin government had sold KAP to CAEC company, which stands behind RUSAL, owned by Russian tycoon Oleg Deripaska. From 2005 to 2013 KAP was managed by CAEF. In 2013 KAP fell into bankruptcy and created a debt of around 360 million euros. The government of Montenegro tried to save the production of KAP in 2008 by issuing government guarantees of 120 million euros as a loan to the Russian owner, to try to continue production. The loan was never refunded and last year the government was forced to pay a rate of more than 100 million euros in credits to KAP from the state budget.