Austria's biggest steel producer Voestalpine has announced the postponement to 2009 of its decision on whether to construct a €5 billion new flats mill on the Black Sea coast, citing the current uncertainty over the global economy.
The company stated that since summer 2007 the Voestalpine Group has been thoroughly investigating growth options in its steel division and, in this context, a greenfield investment for a new flats producing plant in the Black Sea region has been under consideration.
However, due to the critical condition of the financial markets and the resulting uncertainty regarding the future development of the global economy, the decision on this expansion project initially planned for December 2008 has been postponed to 2009. The company added that a decision in the near future also seems not justifiable given the decisions of the European Parliament on proposed climate protection rules that are very critical for the industrial base in Europe.
According to Voestalpine, the preliminary work for the decision will however continue unchanged.
Voestalpine's proposed plant in the Black Sea region, which was announced a year ago, was intended to meet increased demand for high quality steel in Eastern Europe and Russia, whose economies have since started to show reduced rates of growth.
As per the initial plans, the Voestalpine plant would have an annual production capacity of five million mt of flat steel products. As previously reported by SteelOrbis, a number of countries including Ukraine and Bulgaria had expressed interest in attracting the investment.