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Oct 03, 2007 17:20 EEST
BUCHAREST (Romania), October 3 (SeeNews) – Austrian steel producer Voestapline said on Wednesday it will invest 18.0 million euro ($25.5 million) to build a steel service centre in Romania as part of its expansion into the fast growing markets of South-East Europe.
“There are very good direct shipping transport routes from Romania to Russia and Turkey, which is why this country was selected for the first step of our expansion strategy in the region,” the company said in a statement.
The construction of the new Voestalpine unit, located in the Romanian Danube city of Giurgiu, will be launched in 2008. It will carry out high-precision cutting of sheet metal, starting in the first half of 2009.
The company now operates five centres, in Austria, Italy and Poland. It expects the total annual operating capacity in its centres to grow to 2.6 million tonness of steel by 2015 from 1.5 million now. It plans to open another two steel service centres, in Turkey and Ukraine, as demand in the Black Sea region is expected to double to more than 50 million tonnes in the next ten years.
“A booming construction industry and accelerated expansion plans by the automotive and the automotive supply industry in southeastern Europe, in particular in Romania, are resulting in demand for steel that is growing,” the statement added.
Last month, Romania and the U.S. Ford Motor Company signed a deal for the sale of 72.4% of Automobile Craiova. Ford Motor Company has pledged to pay 57 million euro for the majority stake in Automobile Craiova. It also will invest 675 million euro in the Romanian company and almost double the number of employees to some 7,000. The U.S. car maker expects to reach an annual production of 300,000 vehicles by 2012 and to be spending around one billion euro annually to support its Romanian operations.
In Romania, the company’s subsidiary Voestalpine Elmsteel, has a steel tubes plant with an annual capacity of 50 million tubes. It plans to start the construction of another in the country within the next few months, the company said, but gave no further details.
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