Smelter’s Production Hike May Signal End of Crisis
Business, Region Wednesday, September 2nd, 2009Sarajevo | 02 September 2009 | Srecko Latal
One of the strongest companies in Bosnia and Herzegovina, the Aluminij aluminium smelter, has started the gradual process of increasing production back to full capacity.
Local media hailed the good news from Bosnia’s main export company, which is based in Mostar, underlining that this may signal the bottoming out of the economic downturn.
The company’s management told journalists that they have started the process of restarting the smelter’s 64 electrolytic cells. These cells were shut down in December 2008, as the company reduced production to cope with reduced demand for aluminum on the global markets, caused by the deepening economic crisis.
All of the electrolytic cells should be back in full production within the next two months, potentially increasing the plant’s output by another 7,000 tons in 2009, the company’s executive director for technology and development, Velimir Cavar, told reporters. He added that the full impact of increased production will be felt in 2010, when the company plans to produce more than 30,000 tons of aluminum.
Aluminij Director Ivo Lasic said that the company’s management had decided to take the risk and increase production, despite ongoing market instability and high production costs, because a significant increase in demand for aluminum was detected on global markets.
Lasic added that Aluminij’s increased production will have a positive flow on effect for many smaller companies in Bosnia and Herzegovina and across the region that are dependent on the smelter and were forced to reduce their production after the Aluminij production cuts.
In a further piece of good news, local media outlets quoted Vjekoslav Bevanda, the finance minister in the Croat-Bosniak (Bosnian Muslim) Federation government, as saying that all ten Federation cantons have met their requirements for the release of the next tranche of an IMF loan.
Earlier this year, Bosnia negotiated the 1.2 billion euros stand-by arrangement with the IMF, which should help the country ward off the worst effects of the galloping global recession over the next three years, and overhaul its financial and social welfare systems. Source: Balkaninsight
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