Steelmaker to boost output in Albania after buying hydro plants

TIRANA Fri Jan 11, 2013 11:45am EST

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TIRANA Jan 11 (Reuters) - Turkey's Kurum, Albania's only steelmaker, plans to increase output by 20 percent after the purchase of four hydro power plants to secure a stable supply of electricity, its general manager said on Friday.

Kurum has been producing steel using electric arc furnaces to melt scrap iron in part of what had been a mammoth communist-era steel mill in the central Albanian town of Elbasan.

The company produced 500 tonnes of steel in 2012 and sees output rising to 600 tonnes this year, Zeki Kaya, Kurum's Albania manager, said in an interview.

"Green energy coupled with steel production is a good industrial integration to create a competitive regional steel industry," he said.

Faced with chronic power shortages in the past decade, Kurum, one of Albania's biggest consumers of electricity, has sought an independent power supply since 2004, Kaya said.

The four power plants, described as small but profitable and newly renovated, produce a total of 400 million kWh hours a year. Kurum plans to increase their capacity by 20 percent.

"That will strengthen our competitive power and definitely encourage us to increase production capacity in Elbasan. Our group needs more energy, because we are also in mining now. We need it for ferrochromium," Kaya said.

Kurum's purchase of the plants appears to be the only successful privatisation last year for Albania. It bid a total of 109.5 million euros ($146.1 million), from which the government will subtract the amount it owes the company in VAT deductions.

The Turkish company also offered to buy state oil company Albpetrol but was disqualified because its two big boxes containing the bid arrived six minutes late.

Vetro Energy, an Albanian-U.S. firm that made the top bid for Albpetrol, has missed its second official deadline to make a deposit as a guarantee so that the 850 million euro sale can go ahead. ($1 = 0.7493 euros) (Reporting By Benet Koleka; editing by Jane Baird)

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