Warsaw, April 11 (Inditop) Steel giant ArcelorMittal, which controls 70 percent of steel production in Poland, has asked the Polish government to stop importing Russian steel which is making a big dent on the profitability of the Lakshmi Mittal-headed steel behemoth.
The Russian steel, which is much cheaper than steel produced by ArcelorMittal, has flooded the Polish market in recent days and a big part of the imported steel is also being re-exported to other European countries. This has badly affected ArcelorMittal’s business in the country, EuAsiaNews reported.
Gregor Muenstermann, president of ArcelorMittal in Poland, has requested Polish Prime Minister Donald Tusk and Deupty Prime Minister Waldmar Pawlak, who is also in charge of economic affairs, to intervene immediately, the report said.
“Because of the low demand we have cut down our production and also laid off 1,480 workers from our four steel mills in Poland by March 2009. If the Polish government does not ban the import of Russian steel then we will have to take more harsh steps and more people are likely to be shunted out,” Muenstermann told Gazeta Wyborcza newspaper last week.
The issue of unemployment is becoming a big cause for the unpopularity of the present Polish government led by centrist parties. The rate of unemployment has already crossed 11 percent as many Poles who have lost their jobs in other European countries have started returning to their native land.
Steel tsar Lakshmi Mittal entered the Polish market in 2003 and in the two following years bought the big four steel mills and modernised them with an investment of four billion euros. He made handsome profits all these years and even in 2008 made 400 million euros (about $527 million) as profit from his Polish investment.
Meanwhile, the ArcelorMittal Group has expressed its concern to the European Commission in Brussels regarding the flow of Russian steel in EU countries.
Brussels is the international headquarter of ArcelorMittal.
