In this paper, the main elements of adjustment processes for the metallurgical industry in system, social and economic aspects are presented. Also, issues connected with the changes in the national economy in the aspects of integration with the European Union are discussed. The results reported in this paper are based on the analysis of the Polish metallurgical industry in the period from 1991 to 2005

C. Kolmasiak

R. Prusak

Z. Skuza

English

Skuza, Z.

Prusak, R.

Kolmasiak, C.

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Restructuring of the Metallurgical Industry in the Aspect of Economics - System Changes and Integration with the European Union

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METALURGIJA 46 (2007) 3, 221-224 221Z. SKUZA et al.: RESTRUCTURING OF THE METALLURGICAL INDUSTRY IN THE ASPECT ...Received - Primljeno: 2006-06-21Review Paper - Pregledni radISSN 0543-5846METABK 46 (3) 221-224 (2007)UDC - UDK 669.1(438):061.1EU=111 UZA, R. PRUSAK, C. KOLMASIAKZ. Skuza, R. Prusak, C. Kolmasiak, Faculty of Materials Processing RESTRUCTURING OF THE METALLURGICAL INDUSTRY IN THE ASPECT OFECONOMICS - SYSTEM CHANGES AND INTEGRATION WITH THE EUROPEAN UNIONINTRODUCTIONnumerous problems arising from the system transformation being carried out. The occurring processes, to a different start of system transformations, on 25 May, 1990 Poland European Communities [1]. Adjusting to the rules of the market economy and to the European Union’s requirements undertakings and forced far reaching changes in the spheres changes could be observed particularly clearly in the iron and steel metallurgy sector. On the one hand, this branch of industry, being of strategic importance, should contribute to the economic policy of a given country, and on the other initial period of transformations gave rise to the occurrence of several alternative concepts of restructuring the Polish In this paper, the main elements of adjustment processes for the metallurgical industry in system, social and economic aspects are presented. Also, issues connected with the changes in the national economy in the aspects of integration with the European Union are discussed. The results reported in this paper are based on the analysis of the Polish metallurgical industry in the period from 1991 to 2005.Key words: restructuring, polish steel industry, European UnionRestrukturiranje metalurške industrije u aspektu ekonomije - promjene sistema i integriranje u Europsku Uniju. -metallurgical sector [2]. As a result, the process of adjusting the sector in question to the contemporary market reality continues, even though Poland has been a full member of the European Union since 1 May, 2004.ANALYSIS OF SELECTED ELEMENTSOF THE RESTRUCTURING PROCESSIn the period of system transformations, i.e. in the early 90s, the Polish metallurgical industry had excessive produc-tion capacities, complicated organizational structures and it and energy. A SWOT analysis carried out for the purposes of the Ministry of the Economy, Labour and Social Policy other things [3]:- as strengths - very experienced academic centres and re-for investment and modernization, a poorly devel-oped processing part of steel mills, a high debt level, -pean Union, a large and developing domestic market, METALURGIJA 46 (2007) 3, 221-224222Z. SKUZA et al.: RESTRUCTURING OF THE METALLURGICAL INDUSTRY IN THE ASPECT ...carrying out steel mills consolidation, and the process - as threats -  high sensibility to changes in demand, debt collections, bankruptcies and social pressures, lack of continues the implementation of the objectives set out in the Government’s programme “Restructuring and Development of the Iron and Steel Metallurgy Industry in Poland by 2006” adopted by the Council of Ministers on 10 January, 2003. the European Commission, and its basic objective is the modernization of the Polish iron and steel metallurgy and acquiring the ability to function competitively in the condi-tions of Poland’s membership of the European Union [3] Admission of Poland to the European Community did not result in any sudden changes in the sector in question, though acceptance of the previously negotiated terms. The decisions contained in Protocol no. 8 obliged Poland to [4]:- not to exceed the amount of  PLN 3 387 070 000 (ap-prox. EUR 846 767 500) that may be allocated for the purposes of restructuring in the period from 1997 to 2003. The above social aid should be granted to eight - to reduce the net production capacities (through the permanent closure of plants) by a minimum of 1 232 000 per year for hot rolled products, 716 000 Mg per year for cold rolled products, and a possibility of increasing - implement an employment restructuring programme (in-cluding service companies belonging in 100 % to the com-comparable to that achieved by the groups of metallurgy industry manufacturers in the European Union.The best implemented, though still ongoing (since 2003 employment restructuring programme has been the one that provides for, e.g., a reduction in employment from 123 000 a result of the clear acceleration that commenced in 1999. In that year, the implementation of the Metallurgy Social - a system of unconditional gratuities and vocational consultancy and retraining for employees covered by on social protections reimbursed from the budgetary resources and the PHARE fund (the European Union’s -placements to subsidiaries, retirements, layoffs and the discussion, change in the employment structure also production departments gradually increased (the number collar posts increased by, respectively, 77,7 % and 22,3 % - according to the data as of May, 2005 [6]). These activi-METALURGIJA 46 (2007) 3, 221-224 223Z. SKUZA et al.: RESTRUCTURING OF THE METALLURGICAL INDUSTRY IN THE ASPECT ...in relation to the annual production of crude steel and as predicted for particular steel mills covered by public aid. but still remains smaller by approx. 30 % compared to the West European metallurgical industry [9].In addition to the above-mentioned changes in the status and structure of employment, another, equally important -cal and engineering progress. Poland’s production of crude steel amounts presently to around 8,4 million Mg (Figure public aid. The structure of crude steel production meets already European standards - the share of steel smelted by converting is 64,8 %, the remaining 35,2 % accruing to the steel from the electric smelting process (the production of in 1992. In terms of grades produced, on the other hand, crude steel is very poor, as the majority of production, i.e. as much as 95,3 %, accrue to non-alloys steels and 4,7 % to only 0,05 % [6]. For a full viability of undertakings (i.e. the values of indices assumed in the restructuring plans - [3]), it is necessary to carry out indispensable investment and -tion of steel products is equal to 65 % of the EU’s average than in 1994 (an increase from 0,4 millions Mg to 4 mil-lions Mg). In the import structure, 66 % accrue to high steel products are imported by Poland from European Union countries). In turn, the Polish exports oscillates around the level of 4 million Mg in recent years (in 2004 it exceptionally reached 4,7 million Mg). The data quoted above indicate that in the trade in metallurgical products, as expressed by amount, Poland is a net exporter (Figure 4.), is therefore unfavourable, amounting to almost 1,5 billion of imports in the domestic consumption of steel products declined, but in order that this trend strengthen permanently, as possible. Presently, the cost of investments being carried almost 500 million EUR accrue to the steel mills belonging to the Mittal Steel Poland group. The investments planned by this company - a continuous steel casting line and a plate are presently imported [9 - 11].Polish metallurgical industry has its bases in the consoli-dation and privatization of this sector of industry. In the -ing groups according to the European Business Activity iron alloys, the manufacture of tubes, and the remaining pre-treatment of cast iron and steel. 25 steel mills had a manufacturing potential, the volume of income (80 %) and the level of employment (70 %). 15 steel mills conducted METALURGIJA 46 (2007) 3, 221-224224Z. SKUZA et al.: RESTRUCTURING OF THE METALLURGICAL INDUSTRY IN THE ASPECT ...as metallurgical products, 4 steel mills had tubes as their basic product, 3 steel mills manufactured machinery and equipment, and the remaining 3 manufactured products, such as ferroalloys, foundry and steelmaking pig irons, and -In the meantime, of the 25 steel mills that had adopted the Iron and Steel Metallurgy Industry Restructuring Pro-in the remaining steel mills, the Treasury has retained, directly or indirectly, either majority or minority share packages [5, 11].The restructuring programme assumed that the pri-vatization of the Polish metallurgical industry should be the criterion of products - tubes, quality steels and products for the purposes of the building industry. This concept had Mittal Steel Poland group. The group included: Huta Kato-establishment of a tube concern. This intention, according CONCLUSIONThe Polish metallurgical industry has undergone huge -sistent. The process of Poland’s accession to the European Union has to a certain extent accelerated and consolidated the occurring transformations. Practically, the privatization activities in the sphere of human resources should be rather targeted at improving the age structure and professional education of the metallurgical staff.Only the technological and engineering restructuring has in many cases remained in the sphere of planning. A particular backlog in this re-spect occurs in the processing side, but is should be borne in mind that investment in the metallurgical industry are long-lasting and costly and the strategic investors has been operating in the market in question for too short a time to be able to make such far-reaching changes.-rently functioning in the European Union’s single market protection, etc.) and has been compelled to adapt itself to the standards prevailing there. The free market rules targeted to economic effects rather than to the amount of steel produced is a factor determining the directions of development of this industry. The present trends (e.g. the attempts to make a merger of Mittal Steel - Arcelor, REFERENCES[2] R. Budzik, R. Prusak, Z. Skuza, C. Kolmasiak: Desing of concep-tion of restructing of polish ironmaking industry, Proc. X Inter-national Metallurgical and Materials Conference “Metal 2001”, 2003.-2006).- 2003).

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Restructuring of the Metallurgical Industry in the Aspect of Economics - System Changes and Integration with the European Union

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