Банкеръ Weekly



Losses reported by the Kaspichan-based ceramics producer Fayans in the last two years result from the plant's restructuring. That became clear on the general meeting of the plant held last Wednesday. Shareholders who used to take high dividends in the past will be disappointed. Still, the great changes are coming to their end, said the appointed as executive director Rosen Filipov - former procurator of the company. On Wednesday he entered the Fayans Board of Directors substituting the Czech representtaive with a Swiss passport Ivan Moroz.
The ending restructuring of the company is expected to stop the accumulation of losses which exceed BGN1.7M for 1999 and 2000, said Mr. Filipov. The electric furnace of the company stopped operation and two gas ones were acquired instead. Temporary losses were also suffered several years ago because of the closing of the tile production which had too high cost price. The separation of the secondary activities of the company brought losses last year too.
Fayans was acquired by the Swiss Ceramic Holding AG Laufen in 1996. In the summer of 1999 the Spanish Roca Group - one of the European leaders in sanitary production, bought Ceramic Holding AG Laufen. Later the members of Fayans Board of Directors were changed. However, the plant started accumulating losses right after the Spanish group entered its management. Shareholders received dividends for 1997 and 1998 totaling BGL4.4MN (over BGL6 per share). In 1999 losses began to accumulate - BGL674,000 in the same year, BGL1.105MN - in 2000. Bulgarian Stock Exchange reacted demonstratively to the results of Fayans. Two years ago the shares of the company cost more than BGL6 apiece and last week they were rarely traded even at BGL2.10. The fact that the state still controls more than 10% of the shares and did not send a representative to the general meeting, is eloquent testimony to its attitude towards its minority stakes.
Still the new owners are keeping the promise they gave to the Privatization Agency (PA) to invest BGL16M in the company. The money was remitted in four tranches, worth BGL4M each.
The new managers aims at making the quality of Fayans's products close to the European one, said Mr. Filipov. That is why the plant operates with imported but more expensive raw materials. The English kaolin, for example, is better than that obtained in Kaolin JSCo, commented Mr. Filipov. The delivery from the recently privatized kaolin producer have different parametres every day, he added. While this company does not improve its production, Fayans will keep importing from Great Britain.
After tile production was liquidated, the plant started producing sanitary porcelain despite the strong competition of the plants of Ideal Standard-Sevlievo. Fayans management is planning to increase the porcelain production capacity by 20% in 2001.

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