The United States Steel Corporation wants to sell its Slovak unit in part because of EU environmental regulations and because of high commodity prices, Slovakia’s Prime Minister Robert Fico said on Wednesday.
U.S. Steel’s Slovak unit said last week that it was considering approaches from several investors interested in buying its plant in Kosice, eastern Slovakia.
Having entered the Slovak market in 2000, U.S. Steel Kosice is Slovakia’s biggest single employer, providing more than 11,000 jobs in the country of 5.4 million people.
It is a key supplier for the country’s three car plants run by Volkswagen, PSA Peugeot Citroen and Kia, which have raised production to record high levels this year despite the Europe-wide economic downturn caused by the eurozone debt crisis.
“The key reasons why the company is thinking about quitting are rapid growth in commodity prices and strict EU environmental legislation,” Fico told journalists on Wednesday.
Those “regulations handicap local firms compared to companies in Ukraine or China, that don’t have to abide by these rules,” he insisted, adding that he had asked U.S. Steel to find a buyer which would guarantee jobs in the region where one in five people are unemployed.
The overall unemployment rate was 13.69 percent in October in the country, a member of the eurozone, which is forecast to top the troubled 17-member currency bloc this year with up to 2.6-percent growth on the back of its large foreign auto sector.
A social democrat and staunch critic of privatisation, Fico attacked the previous right-wing government of Mikulas Dzurinda for selling the almost bankrupt Eastern Slovak Iron Works (VSZ) to United States Steel Corporation in 2000, giving it a 10-year tax holiday.
“They took everything Dzurinda and his government gave them, used it, and now they’re leaving,” Fico fumed.
Slovak media reported earlier this week that the U.S. Steel had already sold the Slovak plant to Ukrainian steel company Metinvest, but the firm denied this.
“We have received expressions of interest in U.S. Steel Kosice… but no decisions have been made so far,” U.S Steel Kosice spokesman Jan Baca told AFP, without providing details.
Tatra bank analyst Juraj Valachy said that the decision of U.S. Steel to leave the Slovak market could be “a strategic decision after the company closed a plant in Serbia earlier this year.”
There it sold its 23-million-dollar plant to the Serbian government for one dollar.
U.S. Steel to quit Slovakia over EU rules: PM
