Czech Steel IndustryCzech Steel Industrybefore and after Accessionbefore and after Accession

JaroslavJaroslav RaabRaabHutnictvHutnictvíí žželezaeleza –– Czech Steel FederationCzech Steel Federation

Ankara 8th Ankara 8th -- 9th August 20069th August 2006

Restructuring the I&S IndustryRestructuring the I&S Industry

2

Macroeconomic Data CR 200Macroeconomic Data CR 2004, 2005, 20064, 2005, 2006

9.8 %

+1.9 %

+0.0 %

+5.8 %

+4.9 %

2005

10.2 %

+2.8 %

+9.7 %

+ 9.9 %

+4.7 %

2004

9.2 %

+2.9 %

+2.0 %

+ 5.0 %

+4.5 %

2006

GDP growth

Industrial output growth

Construction output growth

Net inflation

Unemployment rate

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Czech Steel IndustryCzech Steel Industry

Production 6.2 mil. tBOF / EAF 90 / 10Long / Flat products 65 / 35Seamless / Welded tubes 60 / 40CC steel / Ingots / Liquid steel 88 / 9 / 3EU 25 Deliveries + Imports 4.0 mil. tEU 25 Deliveries + Exports 4.4 mil. t

4

Share of Czech SteelShare of Czech SteelW

orld

stee

lpro

duct

ion

(Mt/y

ear)

ShareofCzechsteelon theW

orldproduction

(%)

Year

5

Technology Type (000 t)Technology Type (000 t)

6

Production CR (000 t)Production CR (000 t)

7

Share of CC Steel (%), Flat Steel (%)Share of CC Steel (%), Flat Steel (%)

8

Apparent Steel Consumption CR (Apparent Steel Consumption CR (ktkt))

9

Main Consumers of Steel ProductsMain Consumers of Steel Products

10

MainMain BranchesBranches of Consumptionof Consumption

11

Total Imports to CR (t)Total Imports to CR (t)

12

Total Imports to CR Total Imports to CR –– outsideoutside EU25 EU25 (t)(t)

13

Total Exports from CR (t)Total Exports from CR (t)

14

Total Total ExportsExports fromfrom CR CR –– outsideoutside EU25 EU25 (t)(t)

15

Changes after Entry Changes after Entry to EU to EU –– TradeTrade

Part of much bigger „domestic“ marketdistinguishing „dispatch“ and „export/import“

Member of customs unionRespecting the EU obligationsHarmonizing the standardsActive role in the European institutes

EUROFERESTA

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Pillars of Viability Pillars of Viability

Environment Socialdialog

Viability

EconomyMarkets

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UPDATED NATIONAL PROGRAMME OFUPDATED NATIONAL PROGRAMME OFTHE CZECH STEEL INDUSTRYTHE CZECH STEEL INDUSTRY

RESTRUCTURINGRESTRUCTURING

(Final Version)

Summarised content of documents concerning restructuring of the Czech steel industry and the present state of the restructuring

Prague, December 2002

Approved by the Czech Government and the European Commission

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Czech Steel Industry Czech Steel Industry –– Parameters to 2007Parameters to 2007

Removal of 1.9 mil. tons of excessive capacity Steel production about 6 mil. tonsGrowing portion of flat productsApparent domestic consumption ca. 4.7 – 4.8 mil. tonsGrowing productivity

8500 employees in hot productionProductivity of ca.700 tons of steel per employee

Two basic lines of product chains : long products based on Třinec Steel Works flat products based on Nova Hut Ostrava

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Restructuring ProgrammeRestructuring Programme

Crucial aspects of the restructuring:constant pressure to reduce costs and increaseproductivityinter-connection of the state support with thereduction of capacities viability guarantees product chains

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Monitoring Monitoring

Fulfilment of The Programme to Restructure theCzech Steel Industry will be regularly monitored

Twice a year from March 2003 to March 2007Complying with the EC criteria

Observing the scheduleState supportClosing of the excessive capacitiesTheir subsequent liquidation

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Social ConsequencesSocial Consequences

Accompanying Social Programme” – Government Resolution # 181/2002 More than 14 000 employees dismissed from 20002000 to 2002, ca. 4 400 people took advantage of ASPIn 2003, the benefit provided to 1200 workersIn 2004, the benefit provided to 800 workersIn 2005, the benefit provided to 530 workersTotal ca. 7000 people under this programmeThe end of the program in 2007

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Social ConsequencesSocial Consequences

Support of new jobs:START programme – support of small business activities for the workers dismissed from metallurgyRegional Development Programme – development of business activities and new jobs in regions touched by restructuringAbout CZK 300 mil. for these programmes annually

Programme of active need for employment (allindustry incl. steel)

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Employees in Czech Steel IndustryEmployees in Czech Steel Industry

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Employees in Czech Steel IndustryEmployees in Czech Steel Industry

Employees in hot

Productivity (t of steel / employee)

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Environmental ProtectionEnvironmental Protection

Since 1991 – association processSince 1992 – legislation, harmonization with EU

the Czech limits were even more strictkey role of the Ministry of Environment

at present, the environmental management issues are fully in accordance with EU Directivesand other regulations

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EnvironmentalEnvironmental ResultsResults

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Investments Investments –– Companies Companies

Programs since 1991:

Total investments – CZK 75 billion

Modernization and new facilities – CZK 50 billion

Environmental projects – CZK 25 billion

+ Old environemntal burden disposal – CZK 8 billion

Similar trends are expected in the future

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Recent SituationRecent Situation

Greenhouse gases tradingIPPC

long time of the approving processREACHEnergetic taxes

effect to the inputs

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Thank you for your attentionThank you for your attention

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