 Strategy |
 MISSION STATEMENT |
The main aim of BBG Alum is to ensure competitiveness for the next decade.
| CHANGES AND PROGRAMS IN PLACE |
Culture
BBG's culture has been changed from one of a command structure to a set up of interactive teams.
Organization
The organization's chart has been rearranged based on practical requirements: increasing production and reducing costs.
Environment
The working environment in the plant and offices has been turned into a modern and practical one.
Motivation
Higher motivation has been obtained through:
Increased salary levels
Setting and achieving higher production targets
Initiating exports from the port of Tulcea (where the factory is located)
Computerization
All aspects of production, finance, commercial and administration have been computerized. An IT center has been set up to back up the operation's soft and hardware.
Quality
Aiming to apply for ISO-9000 certification, a quality assurance program is in place.
Personnel
To better adapt to an international environment, we are recruiting younger personnel skilled in English.
Training
Training the staff in computer and IT has been done through specific programs.
Projects
66 projects to modernize, de-bottleneck and expand production capacity have been identified and will be implemented.
| INVESTMENTS |
Total investments from May 1999 to the end of year 2000 will amount to US$ 17.4 million.
| THE SITUATION TODAY |
Increased capacity
It has been increased From 20,000 MT of alumina per month to 38,000 MT
Cost Reduction
It has been reduced from US$ 275 per MT in the first half of 1999 to US$ 205 per MT in October 1999.
Increased exports
For the year 2000 a total of 240,000 MT (at US$ 249.50 / MT) in export contracts have been secured. Today 70% of the production is destined for exports.
Secured supply
A contract for the supply of 850,000 MT of bauxite per year has been agreed with AlloSwiss and an Australian firm until 2002. It could be extended if needed.
Own bauxite mines
The purchase of 50% of the shares of a bauxite mine will ensure BBG an extra-supply of bauxite of 250,000 MT. A joint venture in another bauxite mine will further secure supply.
Credit lines
BBG has obtained US$ 13,5 million of credit lines from two local banks in order to improve operations.
| GOALS |
Further increased capacity
BBG plans to expand the plant capacity from 400,000 MT to 600,000 MT/year. The next phase is a feasibility study to increase capacity to 800,000 MT, which would place BBG at par with international medium size factories. |
Vertical Integration
Part of BBG's strategy is to vertically integrate the industry in Romania. There are plans to purchase shares of local aluminum smelters in order to better compete at all fronts in international markets.
Secure supply
The purchase of mining rights for the supply of bauxite is a strategic step that will allow BBG to be self-sufficient and independent from the changes of bauxite prices. This will ensure the supply of bauxite at competitive prices.
Saving energy
50% of the production costs of alumina goes into energy. The implementation of a gas pipeline (a project BBG is working on) would help BBG Alum to be more cost efficient, increase its performance and to be more ecological.
Modernization of the Factory
Presently BBG is working on a vertical kiln project which will be finalized in October 2000. This is part of the improvements and modernization plan for the factory. No improvement in the premises had been done since it was built. Since the new management took over in May 1999 until the end of 2000, US$ 17.4 million will have been spent in modernizing the premises.
Special alumina
Due to the relatively small size of the factory, BBG is trying to specialize to increase its competitiveness. The first improvement has been the change of production from floury to sandy alumina. The next step is the diversification into specialized chemical alumina, for which a joint venture has been set with an American company. This will secure niche an a percentage of the market share for BBG Alum's products
Cost reduction
In order to increase benefits, BBG has targeted to reduce the production cost per MT from the present US$ 205 to US$ 180.
Note: fuel oil price forecasted at USD/MT 125, starting with May 2000
Local and international markets
To supply the local market remains one of the priorities of BBG, yet a strong emphasis is placed on exports. In October 1999 two contracts signed with Glencord and Transworld has insured exports for 10,000 MT/month. In order to be more efficient in the transportation of alumina, BBG Alum has plans to purchase the port of Tulcea. Through access to the Black Sea almost any destination in the world will be able to be served. |
