Romanian PM: TMK-Artrom To Get Cheap Gas From Local Production

Romanian steel pipe producer TMK-Artrom Slatina (ART.RO) will receive gas from the domestic production, which is cheaper than imported gas, while the company’s slag resources will be used in infrastructure works such as asphalt preparation, Premier Emil Boc said Tuesday.

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The slag is the waste material resulted from the metallurgical plants.

Boc said the Romanian Government aims to support TMK-Artrom Slatina as well as the other companies to face the economic crisis, given the European Commission bans the granting of state aids in the metallurgical industry.

TMK-Artrom Slatina is majority owned by Russian TMK Group, through its TMK Europe subsidiary, with a 92.66% stake. TMK Group also owns steel mill TMK Resita (RESY.RO).

Both TMK-owned plants in Slatina and Resita are ones of the most important companies as regards strategic investments countrywide, with over $215 million investments and over 2,000 employees, Boc said.

The Romanian Government decided end-May that local electricity and thermal power producers and chemical plants will receive, in the June-October period, only natural gas from local production, which is cheaper than the imported gas, in order to better deal with the economic crisis and avoid laying off 9,000 employees.

The decision would allow the supply with exclusively local produced gas, at a lower acquisition price, to permit these industries survival.

This decision aims at supporting the companies in the local energy and chemical sectors during the economic crisis, its effect being to keep in function the chemical and power companies obtaining revenues for the state budget and to avoid the agriculture’s dependency from the imports of fertilizers.

TMK-Artrom Slatina reported losses worth RON32.91 million in the first quarter of the year, from a RON606,000 net profit in the similar period a year earlier.

The company plans to switch to a RON33.6 million gross profit in 2009, after closing last year with a RON64.4 million loss.

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