Romanian Govt, Austrian Steelmaker Voestalpine To Sign MoU Today – Govt

Prime Minister Tariceanu and the ministers involved in writing the memorandum of understanding with Austrian steelmaker Voestalpine on the building of a steel mill worth EUR5 million, discussed its clauses before the Government meeting.

“The prime minister and the ministers involved in the matter discussed for about an hour the clauses stipulated in the memorandum of understanding before the Government meeting,” government sources told MEDIAFAX Wednesday.

According to them, if the document is approved in Wednesday’s Government meeting, the Romanian Government and Voestalpine will sign the memorandum today around 4 p.m. Preparations are underway for the ceremony.

Three weeks ago, Tariceanu and the management of the Austrian company agreed to sign the memorandum in the first part of October, leaving Voestalpine to decide in December in which country it will build the steel mill.

Voestalpine plans to build a steel mill in Eastern Europe, following investments worth EUR5 billion.

The government sought an alternative to a land Voestalpine requested around Constanta seaport, whose concession was won by Romanian port operator Comvex SA in June 2008.

Comvex is the largest merchandise operator on the Black Sea, the only one that can operate large ships and which plans to enlarge its storage capacity. Voestelpine might benefit from two of the deposit lines.

Voestalpine might also build a power plant near the steel mill that would cover 80% of the unit’s consumption, while for the rest, the company is negotiating with electricity traders, including Romanian state-owned power grid Electrica SA.

The company, jointly with Belgium’s Electrabel might build a power plant in Romania, but a decision in this respect is to be made only if the group builds its steel mill in Romania.

Romania’s competitors for attracting the investment are Bulgaria, Turkey and Ukraine.

Voestalpine signed in September a memorandum of understanding with Bulgaria, which is considered a new step in the building of the steel manufacturer in Bulgaria.

The company is already operating in Romania by its British unit Elmsteel, which owns a plant in Satu Mare county, northern Romania, since 2004.

The group said last October it will invest EUR18 million in a service center for processing plate steel and other construction materials, whose building will start in 2008 in Giurgiu county, southern Romania.

The group reported revenues of EUR10.5 billion in the fiscal year 2007-2008, 51% above the level of nearly EUR7 billion reported a year before, and a 31% higher net profit, to EUR1 billion.