Poland: Ukrainians renounce iron supply contracts

18-10-2004, 12:15

Poland/Enterprises/Metals and Mining

Warsaw (Puls Biznesu) – CZH, Poland’s company specialising in iron oar imports for Polish steel plants has problems as its Ukrainian partner Kriybas Ruda renounced the contract for iron delivery. ‘We signed an agreement for one year in December 2003. In September, they informed us that the agreement had been cancelled because Kriybas Ruda’s owner had changed’, Janusz Nogowczyk, CZH deputy CEO said.

The contract provided the delivery of 200 thousand tonnes of iron ore a year, worth PLN 30 million (EUR 6.9 million). The violation of the agreement is also against the Ukrainian trade code. CZH has hired lawyers and plans filing a suit.

One of CZH’s clients is IPS, being privatised by LNM. ‘This is CZH’s problem, not ours. Our steel plants use 20 thousand tonnes of iron ore a day, so the delivery from CZH is just a matter of 10 day’s deliveries for us. I have not got any signals this would be a difficulty for us. The four steel plants owned by our concern use 7 million tonnes of ore a year. ISP buys it in Ukraine, Russia, but also in Brazil’, Jerzy Podsiadlo, IPS deputy CEO explained.

CZH, a state-owned company used to a monopolist in iron ore imports for years. Iron constituted 95 percent in the company’s business. Today the share is much lower. Last year, the company had PLN 1.1 million of net income at PLN 263 million of sales.

(PLN 1 = EUR 0.232)

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Puls Inwestora / Poland: Ukrainians renounce iron supply contracts