November 4 (SeeNews) - Croatian steel pipes producer CMC Sisak, a subsidiary of U.S.-based Commercial Metals Company (CMC), posted a loss of $15.3 million (10.4 million euro) in the fourth quarter of its fiscal year ended August 31, 2009, 80% up from the previous quarter.
"Our tubular mill in Croatia continued to struggle with the downturn in energy markets as well as increased Chinese competition in nearby markets," the parent company said in it annual report for fiscal year 2009.
"CMC Croatia's fourth quarter shipments of 12,000 tonness were the lowest of the year. The collapse of energy markets combined with increased Chinese competition in the North Africa/Middle East markets severely impacted revenues. Our caster renovations are complete and will allow us to sell billets when market opportunities arise. Our renovated furnace should be completed in the second quarter of fiscal 2010," the report said.
In July, local media quoted the board chairman of the Croatian unit, Pasko Vela, as saying that the parent company is investing $54 million in a new electric arc furnace at CMC Sisak.
"Croatia will continue to incur losses until its capital expenditure program is completed and the energy market improves," CMC said in the outlook section of its annual report.
International steel markets, with the exception of the Asia Pacific region, remained weak over the review period. Going forward, recovery in Europe is likely to be mixed with Poland likely to lead Central Eastern Europe (CEE) with improving gross domestic product growth, CMC said.
The CMC group's net earnings for the year ended August 31, 2009 plunged 91% to $20.8 million on net sales of $6.8 billion.
In July 2007 CMC, through its Swiss subsidiary Commercial Metals International, wrapped up a deal to buy from the Croatian government 100% of the debt-ridden Valjaonica Cijevi Sisak, and changed its name to CMC Sisak (www.cmccroatia.com) in September of the same year.
The mill in Croatia has an annual capacity of 300,000 metric tons and produces seamless, welded and cold processed pipe.
Across CEE, CMC also operates two mills in Zawiercie, in southern Poland.
($=0.6782 euro)