Let us not let big industrial players slip away from Slovakia

Photo source: HNonline.sk

The poor situation in Slovak industry leads not only to layoffs and the shutdown of production, but also to companies relocating far beyond our borders. This is also the case with the largest Slovak and Central European company producing casting alloys for the steel industry.

From Orava to Uzbekistan

Already last year we drew attention to the problems of Oravské ferozliatinové závody (OFZ), which, like many others, were „floored” by expensive energy, a poor market situation and insufficient government support. Production was being shut down and employees laid off, with their number falling from 300 to 100. What has changed this year? Almost nothing. The state has still not launched the promised call for assistance to large enterprises. The Orava metallurgical company therefore decided to move part of its production to Asia. To Uzbekistan. The reason is an effort to at least partially maintain its market positions.

The problem lies in insufficient support for industry in Slovakia

According to OFZ’s CEO Branislav Klocok, the main reason for this step is Slovakia’s diametrically different stance on supporting industry compared, for example, with France or Germany. Compared with abroad, this support is zero. He commented as follows for Hospodárske noviny:

OFZ therefore decided to move part of its production furnaces to Uzbekistan and, with the help of a partner, to launch production there. On that market it will initially employ a hundred people. The acquisition and the start-up of the new plant will, however, require millions of euros. The company sees no other option, since no concrete reactions have so far come from the representatives of the Slovak government. The only one was a statement to the effect that they had been loss-making even before the crisis and do not intend to bail out companies with taxpayers’ money.

„OFZ alone does not mean all that much for Slovakia, but we are a litmus paper that carries over into the economy. And that signal really is not good”, Branislav Klocok said for Hospodárske noviny.

What could help relieve the burden on Slovak industry?

To the question of what energy prices OFZ would need in order to keep production in Slovakia profitable, the company’s CEO answered as follows: „The same as those paid by our competitors, for example in France.”

He also proposes two main measures: The first could be a so-called handbrake in the event of a disproportionate rise in electricity prices. In the European Union this works as a matter of course. The second, longer-term measure could be a so-called flexibility instrument for modulating consumption and balancing fluctuations. A combination of these two instruments would, according to Branislav Klocok, lead in Slovakia to lower electricity prices and better competitiveness.

Watch the full interview for the Hospodárske noviny television. You will learn more.