Банкеръ Weekly



The Plovdiv-based Non-ferous Metal Works (KZM) was privatized on July 25, 2000. The buyer, KZM 2000 MEBO company, acquired 80% of its capital and paid USD14.6MN. At present, the management buyout controls 90% of the assets of KZM. The rest of the shares are held by minority shareholders. The State still controls 0.48 per cent of the assets. KZM has opened a new plant which will produce sulphuric acid and steam. The plant will not suppress the emission of sulphuric dioxide, but will reduce it twice. USD70MN has been invested in its construction. Most of that amount - USD60MN, was provided by the Japan International Cooperation Fund, and the balance - by the Black Sea Bank for Reconstruction and Development.The credit agreement between the Japanese fund and KZM was signed on October 18, 1995. It aims at financing a programme for reducing the pollution caused by the plant's operation. Part of the initiative was this sulphuric acid plant. The investments for the overall project, to be completed by the year 2007, total USD90MN. Apart from the sulphuric acid plant, a local water treatment station should also start operations by then. Another facility provided by the same project is the demineralized water installation which started functioning last November. In 1997, the Japanese Marubeni Corporation was appointed chief executor of the programme aimed at reducing the effects from KZM's pollution. In order to cope with the damages to the environment, KZM has also hired the EcoStroy 2002 consortium. It will reconstruct the plant's dump for industrial and dangerous wastes. The technical study has been enthrusted to the German company Lurgi. Several Bulgarian companies participate in the project's implementation as sub-contractors - Chimremontstroy, Energoproect, and others.KZM's operating revenues amounted to BGN162MN by November 2002 and its accounting profit was BGN1.6MN. However, the core operation brought losses to the enterprise. The poorer financial performance according to KZM's Executive Director Nikola Dobrev was due to the low international prices of metals and the drop in the US dollar exchange rate.

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