Pandža: The postponement of the payment of electricity only temporary bridges the problem

Aluminij Mostar

The consent of the FBiH Government to Elektroprivreda HZHB and Aluminij d.d. Mostar for taking actions on resolving issue of electricity supply for Aluminij, with the possibility of delaying payment 60 plus 60 days, Aluminij’s Management is evaluating as an important, but not as a key step on the path of a permanent solution to the accumulated problems that burden the Mostar’s factory.

- The reality is that we still do not have a signed contract because Elektroprivreda HZHB must respect the procedures for making such a decision. If the signing of the contract comes in the way that the Government has indicated, this will only enable our survival, but not the stability. Namely, those 60 plus 60 days would be an important breakthrough for us which, with our powerful internal savings and optimization of work processes, might have enabled us to survive in 2019. However, for a real long-term solution to this situation and to secure Aluminij's future, far more concrete steps are needed - commented Acting Director of Aluminij Dražen Pandža.

First, he underlined the need to comply with Annex 8 to the 2013 Agreement, which clarifies the Government's way of subsidizing supply of Aluminij with el. energy. But people in power, primarily in the entity ministry, are again warned, by Aluminij, of other objective actions that the government should take.

- The reference exchange for electricity trading in BiH is that in Hungary, and as Hungarian HUDEX has to operate according to the EU's practices, adds the enormous margin to the prices that the EU prescribes with the aim of reducing harmful CO2 emissions. It is these values ​​that have led to tremendous disturbances in electricity prices, and now, after long-lasting Aluminij’s appeals, other business entities in BiH are beginning to feel uneasy about spending on consumption of el. energy. The government should finally have to hear us - explains Pandža.

Namely, as BiH is not in the EU, the FBiH Government could create a legal framework for exclusion of domestic consumers from these charges, which would lower the prices automatically, and there are also issues of other state subsidies that cost € 7.1 which users of el. energy have to pay to the state.

- There is plenty of room for a clear national strategy for protecting and securing the development of the domestic industry and we hope for the courage of responsible authorities to take advantage of these opportunities. The Aluminij Management does not want to deal with speculations about the sale of stock packages, respecting only the owner's right to deal with that part of the company's strategic plans. The Management has a mandate to do everything to stabilize our business processes, but under these circumstances, that we are exposed, it is still an impossible mission for the longer term. Again, by concluding the contract with the EPHZHB and getting a 60 plus 60 day delay, it does not change the fact that the el. energy will still exceed 60 € / MWh, plus 7,1 € / MWh for the state, which we cannot afford – said Pandža.

He announced the completion of the audit report, which, as requested by the government, is being drafted by the international audit company KPMG. He also recalled the recent strikes of warning under the leadership of the Aluminij’s union trade organization.

- We do everything we can to ensure that the salaries are on time and to protect the rights of our employees, and we negotiate with the Government on how to resolve the issue of residual pension insurance contributions. In addition, this year, we will go on optimizing the production process, which means a decrease in production in Electrolysis and increase in surplus in the Foundry, while internal savings remain our constant task. However, all this will have no benefit or no sense without the Government activating the commitments from Annex 8, without removing EU subsidies for BiH consumers of el. energy and without the revision of state charges for importers of el. energy, in terms of payments for Elektroprijenos, NOS and renewable energy sources - said Acting Director of Aluminij d.d. Mostar.

In the end, he also mentioned the media writings of the so-called controlled bankruptcy of Aluminij, repeating that the Government has never officially offered or provided such advice to the Aluminij Management.

- Something like this would have been a strategic decision outside the mandate of the Management. Our Supervisory Board convened a Shareholder Assembly for January 11, 2019, and if the owners want to act in this or in any other direction, they will decide on that at the Assembly. Management will act in accordance with the strategic goals set by the owners. That's their indisputable right - Pandža concluded.

Aluminij Mostar
Corporate Communications