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Slovakia may offer U.S. Steel incentives to remain as mill owner

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By Bloomberg News
Tuesday, Nov. 20, 2012, 6:42 p.m.
 

U.S. Steel Corp. has yet to complete talks to sell its steel mill in Slovakia, prompting officials in the eastern European nation to push to keep the steelmaker there, Slovak Premier Robert Fico said.

The government is ready to offer incentives to ensure the company remains at the local plant, one of the largest employers in the country, Fico said. He met on Tuesday with the unit's chief executive officer, David Rintoul, in Bratislava, the capital.

Jan Baca, a spokesman for U.S. Steel, declined to comment on the government's offer. The Pittsburgh-based steelmaker said Nov. 13 it received an offer for the company's last European steel mill and is considering it.

“Based on the direction of the discussion, I think that they will rather leave,” Fico said. “If they choose to stay, the government is ready to talk about the conditions.”

U.S. Steel is paring back operations in Europe, where slowing demand is weighing on prices and shipments. In January, it sold its Serbian mill for $1, triggering a $399 million charge in the first quarter.

The charge led to U.S. Steel reporting a $219 million loss in the first quarter.

U.S. Steel's European segment lost $162 million in 2011, and a “continued difficult economic environment” was expected there in 2012, CEO John Surma said this year.

The Slovak plant has been more profitable because it makes higher-grade steel for autos, officials have said.

U.S. Steel bought its Slovak operations in 2000 for $475 million. The operations have an annual production capacity of 5 million tons and include two coke batteries, three blast furnaces and other units that produce sheets, tin-mill products and pipes.

 

 
 


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