Alcoa-Köfém says fully complies with govt support contract
Alcoa-Köfém, the Hungarian unit of US aluminum producer Alcoa, said on Thursday it has complied fully with the prevailing stipulations in a contract for government support received for an investment completed at its plant in Székesfehérvár (C Hungary) in 2008, rejecting suggestions in the press that the unit had failed to do so.
Alcoa-Köfém received HUF 2 billion subsidies for the €70 million completed investment on the condition it raises export sales and employment, the latter by nearly 200, between 2008 and 2012, MTI reported in February 2008. The contract on the state support has been modified several times in connection with the 2008 autumn global economic crisis.
The daily newspaper Magyar Nemzet reported on Thursday that government commissioner Budai Gyula has asked National Economy Minister György Matolcsy to initiate talks with Alcoa-Köfém aimed at compelling the company to comply with the provision in its support-contract concluded with Hungary's previous, Hungarian Socialist Party-led, government in 2005.
Magyar Nemzet said that the employment at Alcoa-Köfém did not rise but actually fell, to 1,692 at present, and the company is unlikely to meet the stipulations of the contract.
According to the daily, amendments to the original contract lifted the export increase obligation, allowed the company to lay off workers and to prove that it reached a yearly employment goal of 2,677 workers only by May 2013. A clause compelling the company to repay the support with a punitive interest if conditions of the contract were not met was also dropped, the daily reported. The paper added that the previous government rejected a request from Alcoa-Köfém to altogether remove from the support contract the provision regarding the number of workers the company must employ.
Alcoa-Köfém told MTI on Thursday that "We have always acted in compliance with the valid contract (modified several times in the course of the global economic-crisis) for state support connected to our investments in Hungary... and intend to fulfill as before, all our obligations."
The company's statement said that Magyar Nemzet's Thursday article regarding the company's state-support contract contained "numerous mistakes," noting that the newspaper did not contact the company with regard to its Thursday article.
Alcoa-Köfém announced in November 2008, following the onset of the global economic and financial crisis, that it would lay off 730 of the 3,777 workers employed at the company's rolled-products plant in the city of Székesfehérvár and integrated electrical-distribution plant in the town of Mór (both C Hungary).
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.