Business, Politics, and Analysis

April 16, 2018 6:26 pm | FILED UNDER: business

Vítkovice Heavy Machinery Back To Work: Resumes Full Production

By ČTK Vítkovice Heavy Machinery

Ostrava, North Moravia, April 16 (CTK) – Vitkovice Heavy Machinery (VHM), a unit of Vitkovice Machinery Group of entrepreneur Jan Svetlik, is resuming full production of its steel plant which has been restricted due to a lack of operating capital since mid-January, Vitkovice spokeswoman Eva Kijonkova told CTK.


Some of the company’s 1,000 employees have been forced to stay at home on 80 percent of their wages since January.


The resumption of production is linked with the ongoing reorganisation of VHM, whose management is being taken over by a new owner, company SPV VTK of entrepreneur Jaroslav Strnad, Kijonkova said.


“The restart of the steel plant is a key moment for restoring the confidence of the market, particularly the German one, which buys a major part of our production,” VHM sales director Jiri Broz said.


According to Broz, the company is in talks on a number of contracts in various industries, such as renewable sources, metallurgy and ship component parts.


“I am convinced that within five or six months, but by the end of the year at the latest, we will gain our main customers back, so that we can start the year 2019 at full performance and reach the planned results,” Broz said.


According to Kijonkova, VHM restarted of all of its individual operations gradually as soon as it managed to find the strategic investor.


Cold processes, such as machining and assembly, were restarted on March 20.


The restart of the steel plant, which is directly linked mainly with the operation of the company’s foundry and forge, is nevertheless of key importance, VHM head Vlastimil Molek said.


The steel plant is yet to undergo a brief shutdown due to some repairs. “I believe firmly that after that we will have enough contracts and continue producing smoothly,” steel plant head Ales Opler said.


VHM has about 900 employees. During the problematic months, some employees left the company. The management is now trying to convince mainly experienced and skilled employees to return, Molek said.


VHM is a producer of steel and steel products. It exports is products to EU countries as well as to Russia, Canada, Brazil and India.


In March this year, VHM filed for insolvency and announced the entry of a new investor. It said it had got into the difficult financial situation as a result of the long-lasting crisis in the engineering sector.


According to its insolvency petition, VHM owes nearly Kc3bn to more than 300 creditors. The court has allowed the company to undergo reorganisation.


Vitkovice Machinery Group includes over 20 companies employing about 3,000 people.


In 2016, four companies of the group got into financial difficulties. While Vitkovice Power Engineering has been declared bankrupt, reorganisation plans were approved for Vitkovice Gearworks and Vitkovice Revmont, and Vitkovice Envi’s reorganisation has been successfully completed.

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