Tuesday, March 8, 2011

Romania’s Alro Sees Output Rising This Year, CEO Dobra Says

Romanian aluminum producer Alro SA (ALR), majority owned by Vimetco NV (VICO), forecast an increase in production this year as demand picks up, Chief Executive Officer Gheorghe Dobra said today, without giving specific figures.

Alro can increase aluminum output by as much as 20 percent in “a few months” if it secures long-term energy supply, Dobra told reporters in Bucharest. Alro may start construction as early as next year on a gas-fired power plant with a capacity of 420 megawatts in the eastern county of Tulcea, Dobra said.

Vimetco, the aluminum company controlled by Russia’s Vitaliy Machitski, expects global aluminum production to rise as much as 30 percent to 55 million metric tons by 2015, Chief Executive Officer Frank Mueller said in October. Alro’s output dropped 17 percent last year to 240,000 tons from a 2008 peak of 288,000 tons, according to Dobra.

“The aluminum orders have started to increase but the prices remain under pressure,” Dobra said. “We expect higher orders from companies in the automotive sector and construction. We can grow our output by as much as 20 percent if we can find the needed energy.”

The power plant project is at an “advanced stage,” Dobra said. “The cost of building a megawatt varies between $1 million and $2 million. We are working on the task book for selecting the equipment suppliers.”

Last month, Alro posted a 71 percent increase in 2010 net income to 160 million lei ($53 million) from 93.6 million lei a year earlier. Sales rose to 1.8 billion lei from 1.4 billion lei. The company said it plans to increase investment this year from $8.8 million in 2010.

Vimetco said on Feb. 15 it’s considering transferring the holding company of its bauxite business in Sierra Leone, Global Aluminium Limited., to its Romanian alumina producer, Alum SA. The proposal will be submitted on March 21 to Alum shareholders.

“The transfer of our management to the Sierra Leone unit has already been done, we still need to transfer the equity,” Dobra said.

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in in Bucharest at isavu@bloomberg.net;

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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