Studies on the two companies show that there is no need to relocate some production units from the Split company to Sisak and that the two companies can be prepared for successful privatisation through separate restructuring processes, especially in the light of the current construction boom in Croatia.
According to the study on Sisak Ironworks, the modernisation of the company this year would require around 7.5 million euros, and another 8.7 million in 2006. The funds would be obtained as long-term loans.
The entire restructuring project is expected to cost more than 200 million euros, depending on the privatisation model, to be determined by the company's majority owner, namely the state.
The modernisation process is expected to result in increased production and labour cuts, after which the company will have some 300 workers. The company could achieve positive business results in 2007, said Sisak Ironworks CEO Damir Begovic.
Split Ironworks CEO Nenad Domljanovic said the company could achieve positive business results as early as 2006, when revenue is expected to amount to 465 million kuna. He added though that the state would have to write off its claims for the company to achieve such results next year.
Total investments in the company until 2008 are expected to amount to 9.5 million euros, to be obtained in the form of long-term loans, Domljanovic said, adding that the company currently employed around 490 workers, the optimal number being 520.