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Italian-Polish steelworks joint venture to receive loan from European Bank
The Board of Directors of the European Bank for Reconstruction and Development yesterday approved an ECU 30 million loan to Huta Warszawa-Lucchini, a joint venture company to be formed between the Italian Lucchini Group and the Polish State Treasury, to modernise the largest Polish producer of wholly scrap-based engineering steels.
"Modernisation of the Huta Warszawa plant will enable the company to provide high quality engineering steels which will improve the competitiveness of Polish industry", said Ron Freeman, Vice President of the Bank in charge of Merchant Banking.
The project involves restructuring an outdated works by closing open hearth furnaces which have been responsible for significant toxic emissions in the Warsaw region and installing modern steel-making and rolling plant. Total capital expenditure will be about ECU 150 million, which makes it one of the largest examples of inward investment in Poland.
Lucchini, the major shareholder of the joint venture, is a medium-sized Italian company with a strong track record in operating scrap-based mills and in restructuring older steel plants. It is among the most advanced and efficient privately owned producers in Europe.
The Polish partners include: Huta SA, a company controlled by the Polish Treasury in which workers have a 20% stake; the Industrial Development Agency; the Polish Development Bank; and various Polish creditor banks to Huta Warszawa. Other partners in the joint venture are expected to include the International Finance Corporation and SIMEST, the Italian government agency which supports joint-ventures in developing countries.
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