Opinions are divided on whether there is any way to save the unprofitable metal production at the Aluminum Plant (KAP). In the Parliament of Montenegro, in the first half of this year, all members of the government and the opposition supported the survival of KAP with the help of the state, which took over two years ago and paid the 23,4 million euro loan in record time (with interest) that KAP owed to Deutsche Bank.
The exception was the deputy of the Albanian party Force, Genci Nimanbegu, who openly called on fellow deputies to think carefully about whether, under the current conditions, production at KAP really needs to be continued and whether KAP should perhaps be closed.
Proponents of the survival of the aluminum company strategically propose the renewal of aluminum processing in one of the existing or completely new processing factories, which requires investments of at least several tens of millions of euros.
It does not pay for electricity, citizens suffer from expensive imports
Similar proposals can also be heard from the Government, but the exact amount of investments that should be invested in new aluminum processing is kept silent. It is clear, however, that Montenegro does not have that money, and the question is whether there will be new strategic investors in KAP at all. While there is still no explicit answer to these dilemmas, the state-owned Elektroprivreda, managed by the Italian A2A, is forced to import electricity, often at a very high price, in order to sell it to KAP at a much lower price than the purchase price, all in order to maintain unprofitable production. of primary aluminum. It is the largest Montenegrin consumer of electricity, and expensive imports are passed on to all consumers.
KAP, on the other hand, does not regularly pay electricity to EPCG, and the Russian managers who have been managing the company since 2005 do not care much about it. Despite the announcements from the first quarter of this year, the executive authorities have not yet prosecuted those responsible for damage to the state budget, i.e. the forced collection of 23,4 million euros from the citizens of Montenegro, which occurred due to the non-cooperation of Russian managers regarding the Government's further plans to at least time delays the return of the entire amount of KAP's loan to Deutsche Bank.
The retrospect of events in KAP over the past 15 years, during which the state saved aluminum production on several occasions, as well as the search for a "straw of salvation" in the renewal of processing capacities, was the occasion for a conversation with Mihailo Banjević, general director of KAP. from October 1998 to the end of November 2005. He managed KAP until December 1, 2005, when management was taken over by an offshore company owned by Russian tycoon Oleg Deripaska, after it paid 48,5 million euros for the majority of the shares.
"The biggest problem when I came to KAP were debts in the amount of 235 million dollars," Banjević emphasized.
He explained that a third of the stated amount of debts related to the so-called pre-sanction debts to the World Bank and other foreign creditors who financed the construction of processing factories in KAP more than a decade ago.
"It owed a lot to domestic creditors as well. We managed to service the obligations of Elektroprivreda, Željeznica, Bauxite Mines and the Port of Bar, and with 78.000 tons of metal, which was the production when I arrived in October 1998, we increased it to 2005 tons (annually) of metal by the end of November 120.000. Banjević stated.
"The biggest problem when I came to KAP was the debts in the amount of 235 million dollars", emphasized Banjević.
He pointed out that they produced metal of the highest quality and properly served the payment of wages to the workers.
"Each payment of gross earnings was a real feat in KAP, bearing in mind the debts and problems we were faced with in connection with maintaining production," says Banjević.
Long ago the equipment became obsolete
At the time of the NATO bombing of the Federal Republic of Yugoslavia in 1999, the Kovačnica processing factory was working in the Combine, which was a military program, which is why it was feared that it might also be bombed.
Banjević says that the problems in aluminum processing were looked into with the help of seven or eight engineers from the USA who "worked at KAP for a year and helped as experts".
"They, as well as our experts, previously stated that the processing was technologically outdated a long time ago. So this story that aluminum needs to be processed is sweet, but behind that sweet story we need to look at the problems. When I was in KAP, I was told that the equipment was out of date for over 25 years, past Kovačnica," Banjević emphasized.
An exception during his directorship was the youngest processing plant Kovačnica, where aluminum from the primary part of KAP was partly used for the production of alloys and logs that were sold to the Sevojno plant in Serbia.
The products were sold to this Serbian factory at a price 100 to 200 dollars more expensive per ton than it would have been if KAP had sold that amount of metal in ingots to Glencore according to the price on the London Metal Exchange.
"The other processing plants were technologically outdated and it was difficult to finance it. We channeled 3.000 to 5.000 tons of metal through processing without the Forge," added Banjević.
In Prerada, according to Banjević, there were ten to 12 products, but there were technological problems with thickness uniformity, edges and quality of cutting.
"It was a significant technological problem," Banjević pointed out.
How much was stolen from KAP
When he left KAP, 3.087 workers were employed in all KAP factories, and when he was appointed general director in 1998, 4.120 people worked in that system.
There are now less than 1.300 workers in the entire KAP, and the transshipment and export of aluminum, under rather strange circumstances, bypasses the port of Bar, so it is exported via the Croatian Port of Ploča by more expensive truck transport.
When asked by "Vijesti" how much theft at the Aluminum Plant was a problem during his time, from petty thefts to truck thefts that occurred even after the privatization of KAP, Banjević answered:
"When I got there, I heard that story, but we changed the management, which also meant a change in security. At that time, KAP had factory security and I was satisfied with its quality. There is theft in heavy industry, but we managed to eliminate it in just a few months. "We expelled about thirty people from the company, on various grounds, because of various theft attempts, and we managed to deal with that theft in a short period of time," Banjević said.
Despite the historically record production of 120.000 tons of metal, in the period from 2001 to 2005, the company recorded a loss in operations in the year of privatization.
Banjević said that with the debts that were inherited from the previous period of KAP's operations and the large number of workers, at that time, a better result could not have been achieved.
"With current electricity prices, the production of aluminum in European electrolyses cannot be sustained, and it is therefore moving to Asia, Africa and South America. It is difficult to work with a price higher than 20 to 25 dollars per megawatt," Banjević concluded.
"With current electricity prices, aluminum production in European electrolysis cannot be sustained"
Đukić: And Banjević helped the gradual shutdown of KAP
A former employee of Prerada, engineer Slobo Đukić, who two years ago was forced to accept the Government's social program and leave the company with severance pay, reminds "Vijesti" that in 1989 they processed slightly more than 11.000 tons of aluminum.
"From 1995 to 1998, annual production was around 3.700 tons. We produced foils and packaging materials, wrappers for chocolates, wrappers for yogurt... Beginning in 1998 and the arrival of director Banjević, the gradual shutdown of production and the closing of this factory began," said Đukić, who notes that the market for Prerada's products was larger partly in neighboring Serbia.
Đukić does not blame the former KAP director Banjević for shutting down the processing facilities because he joined the aluminum company from the PIO Fund, as he does the university professors from the technical faculties who, as he points out, have been silent about the problem for years.
Most workers know that the factory provided a lot to the managers of KAP - from excellent wages to substantial severance pay.
The professors are silent
Đukić points out that Prerada was neither closed nor conserved in order to preserve its property.
"Former engineers from Prerada are now forced to work as guards, for private companies, for a salary of 300 euros, which is humiliating. All the professors from the technical faculties (Mechanical Engineering, Metallurgy and Technology) of the University of Montenegro, with the exception of Professor Branko Radulović, remained silent and are still silent today, which is the most painful because they are currently training personnel for the Kombinat or Nikšić Željezara. "Almost all the professors were half-heartedly silent," Đukić concluded.
Bonus video:
