Ljubljana, Wednesday, 3 February 2016 – The European Bank for Reconstruction and Development (EBRD) has discussed current cooperation with the SIJ Group.
Today the SIJ Group management met with Philip Bennett, the First Vice President of EBRD. As part of his working visit to Slovenia, Mr. Bennett visited the headquarters of Slovenia's largest metallurgical group today, and discussed current cooperation with SIJ Group. The cooperation began last year, when EBRD invested EUR 8.5 million in the five-year bonds issued by SIJ (17% of the entire issue), the first investment of its kind to be made in Slovenia by this renowned international financial institution.
At the meeting, the SIJ Group management made a detailed presentation of the Group's sustainable development strategy up to 2020. As part of the strategy, the Group has already entered a new investment cycle (the previous cycle, which lasted seven years and was worth over EUR 400 million, concluded in 2014). The new investment cycle will be based on targeted investments in the Steel Division, enabling further optimization of the production mix, improvements in the energy efficiency of production, and an increase in the production capacity of the most profitable production programs of the Group (stainless and special steels, high-alloy tool steels, and alloys).
The SIJ Group will use a significant proportion of investments for the production of end steel products (the reorganization of companies at Ravne na Koroškem, and the founding of a new production company, Ravne Systems, are important steps in this direction) and for environmental investments, which are intended to continue to reduce our environmental footprint at Group level and to introduce new models of sustainable operation.
"Regardless of the fluctuating macroeconomic conditions that we have seen recently in the raw material markets, the SIJ Group management continues to stand behind the Group's strategy of development up to 2020, responding to the challenges by actively modifying the production mix, fulfilling the investment cycle, and continually searching for new market opportunities in niche steel segments. The latter is made possible, and is actively supported, by the Group's business model, whose efficacy was clearly shown in 2014, while its robustness was demonstrated last year, when the SIJ Group continued to operate successfully despite the weaker external market conditions. We are extremely pleased that this has been recognized by our financial partners, including EBRD," said Anton Chernykh, President of the Board of Directors of SIJ, at the close of the meeting.
At the meeting, the EBRD representatives particularly focused on the importance of investing in the environment and sustainable development, something that should become an integral part of industrial production and development in the 21st century. The SIJ Group has a number of references in this field, such as the introduction of non-acidic cleaning of cold rolled strips at Acroni, and the award-winning project to use waste heat for district heating at Ravne na Koroškem, which was launched a few months ago and will continue to expand in the future.
"The bank is actively monitoring the operations of the SIJ Group and is satisfied with current cooperation. We are very much interested in the effect of next investment cycle, including those investments that are already in place. Special attention should be paid to implementation of strategic investments in the Steel Division with significant environmental and sustainability multipliers," said Philip Bennett, the First Vice President of EBRD.
The SIJ Group is the largest Slovenian vertically integrated metallurgist group, ranked among the top market positions in the European and world niche steel markets. The Group comprises five business areas, has 22 affiliated companies in Europe and the USA, and employs 3,200 people.
In 2014 the SIJ Group generated EUR 707.8 million in revenues, a 7% increase in comparison with 2013. The EBITDA increased by 91% reaching EUR 77.8 million. The 11% EBITDA margin that was achieved put the SIJ Group among the most successful world steel producing groups in 2014. The EBIT amounted to EUR 39.6 million and increased by 18 times in comparison with 2013, and net profit was slightly less than EUR 25 million.