Croatian Government issues a Press Statement of Concern of possible Bankruptcy of Aluminij Smelter in Mostar

July 14, 2019 12:00 PM

The Croatian government, a minority stakeholder in the Mostar-based Aluminij smelting plant, has announced consultations with the company’s management and the government of Bosnia and Herzegovina’s Federation over the debt-ridden smelter and considers that it is necessary to thoroughly change its current business model to make the company successful.

The Croatian government has a 12% stake in the plant, while Bosnia’s Bosniak-Croat Federation entity is the biggest single shareholder with a 44% stake, and small shareholders hold the remaining 44%.

The Andrej Plenković cabinet today issued a press release to express its concern over the latest developments in Aluminij, which was disconnected from the power grid a few days ago over debts incurred because of high electricity and alumina prices, and the consequent discontinuation of production in the night between 9 and 10 July.

The Croatian government “expresses concern and regret at such developments in a company of strategic importance for the Croat people in the Federation of Bosnia and Herzegovina and for the economic development of the whole of Bosnia and Herzegovina”.

Being a minority stakeholder, the Croatian government believes that market and economically justified and competitive production in Aluminij can be accomplished only by the thorough change of the current business model of Aluminij in line with the best European business practices. For that change to be made, the support of the Federation’s government is needed.

The company’s management has announced filing for bankruptcy.

The Croatian government’s representatives are going to hold consultations before the next stakeholders’ assembly with the Bosnian Federation’s authorities and the Aluminij management so as to consider possible solutions for the company’s challenges.

On Thursday, hundreds of disgruntled employees of Aluminij took to the streets in Mostar to protest against the closing of the plant.

Also on Thursday, Croatian President Kolinda Grabar-Kitarović expressed concern over the fate of 900 workers at the Aluminij smelting plant in Mostar, Bosnia and Herzegovina, and due to the escalation of the problems at that strategically important company, she requested an opinion from the Croatian government.

Aluminij is the largest company in Herzegovina with about 900 workers and a turnover of approximately 163 million euro. It was founded in 1981 and stopped operating during the 1992-1995 war. After the war it was reconstructed with the assistance of the Croatian government in 1997. Croatia owns a 12% share in the company, the government of the Federation of Bosnia and Herzegovina entity holds 44% of its shares and workers hold the remaining 44%, Hina reports.

 

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