In November 2000, when USX Corporation took over 24.6% of VSŽ, the latter lost its major core business, the steel production. Today, who are the main shareholders of your company?
The list of the main shareholders of our company as to 14 February 2002 is following:
USSAC, Inc. owns 24,54 %.The National Property Fund owns 16.46%. Poštová banka, a.s. owns 11,87 %. The Bank Austria-Creditanstalt owns 10,09 %. The rest of the shares belongs to a few other financial groups.
Your company is now a holding group controlling a great variety of businesses. Can you enlighten our readers on the main activities you are currently involved in?
As you mentioned, in November 2000, the American USX Corporation took over VSŽ's steel-making operations and transformed it into US Steel Kosice. Until then, VSŽ a.s. Košice was the major Slovak Steelworks. As a consequence, VSZ has kept activities not directly linked with the metallurgical production. We have majority shares in 18 companies that can be divided into four groups according to common characteristics:
1. Companies (further processing) capitalising metallurgy products:
Among the basic spheres of business of these companies is processing of flat rolled materials, production of profiles, steel constructions and castings.
2. Companies producing machines and equipment:
Their main business spheres are: production of machines for cutting and bending of sheet metal and pipes, production of parts of textile machines, production of line feeders, gas boilers and large-capacity kitchen equipment.
3. Companies directly providing metallurgy production for U. S. STEEL Košice:
Their sphere of business mainly includes following activities: packaging of steel products, supplies and maintenance of electric and control systems, reconstruction and maintenance of railways and siding tracks, supplies and repairs of refractory linings, operation of cranes, small maintenance, production of spare parts, treatment and supplies of steel scrap, dividing and production of cut sheets from sheet steel.
4. Companies providing services and others:
The business of these covers the following spheres: catering services, cleaning, administration of buildings, renting of non-residential premises, travel agency services, recreational and regeneration stays, medical and sanitary services, maintenance of buildings, administration and maintenance of forests, training and education of employees, administration of flats.
The VSŽ, a. s. Group also includes the company producing building masonic materials.
Generally, VSŽ owns property, like real estate, machines and production tools which are leased to daughter companies for operations. VSŽ collects lease charges. There is a mutual interest to achieve the maximum return on assets.
This sort of agreement can be very profitable if there is a good synergy between the two companies. However, sometimes, it must bring about some conflicting situations…
Sometimes yes. We recently had to change the whole management team of one of our companies.
It is very important for us to keep a close look on the financial situation of the companies. We should deal with various aspects of the management of the companies to assure that their performance is in accordance with the holding strategy.
The structure of VSŽ a.s. Košice is still very diversified. What are your restructuring and development plans over the next two years?
Over the past two years VSŽ a.s. Košice has undergone a major restructuring after the sale of steel assets and now VSŽ should re-define its vision and refocus its activities. | We already produced new VSŽ Strategic Targets and defined main steps to achieve these targets. Effectively, VSŽ wants to focus on three major core businesses:
(i) activities concentrated in VSŽ Inžiniering with foundry, bridge plant and Servis-centrum processing flat steel products, (ii) U.S.Steel Service, concentrating service activities for U.S.Steel Košice, s.r.o., (iii) machinery and related companies.
As for the other activities, we have already sold a few non-core businesses. With other companies and businesses we are looking for foreign investors whose core business may be related to the activities in our non-core daughter company. In the meantime our target is to increase their efficiency and profitability.
I would like to add that currently there is the best time for a foreign investor to invest into VSŽ shares. As you may know, one of the terms of the transaction with US Steel was the US Steel legal obligation to pay out to VSŽ shareholders USD 75mn dollars in 2002 and 2003, depending on US Steel Kosice's results in 2001, which have been outstanding. Any foreign investor buying VSŽ shares would automatically benefit from those exceptional dividends.
VSŽ a.s. reports net profit for year 2001 in amount of 765 mil. Sk (more than 15,5 mil. USD). The Business plan for year 2002 anticipates net profit more than 200 mil. Sk. In year 2001 VSŽ recorded som specific, non-repetitive accounting transactions, resulting from the sale of steel assets to U.S.Steel Košice s.r.o.. Main strenght of VSŽ a.s. is the robust and very liquid balance sheet with modest external liabilities. VSŽ a.s. created provisions and reserves for all anticipated enterpreneurial risks.
Besides, VSŽ a.s. thanks to its healthy financial situation with excellent financial indicators and liquidity can support development projects in our companies and to finance various forms of joint alliances. The portfolio of daughter companies offers a highly qualified labour force in engineering, metallurgy, and services. All our companies have an excellent geographical location for distribution to Ukraine, Poland and Hungary.
You have been Chairman & CEO of VSŽ a.s. Košice since February 15, 2001. Can you tell us more about the steps that marked the development of your career path before and after you joined the company?
Having finished my studies at the Faculty of Law of Pavol Jozef Šafárik University in Košice, I worked as a special prosecutor in the Regional Prosecutor's Office in Prešov for five years. After 1989, I held various managing posts in garment's industry including joint ventures. At that time I acquired managerial skills and habits from various specialist areas which are necessary for my work today.
When I was elected the Chairman of the Board and President of VSŽ, my main objective became to stabilise the situation in the company. It was a difficult process since after the sale of steel assets to the U.S. Steel Košice, it was necessary to thouroughly analyse the new situation of the company. VSŽ still owned various capital shares and needed to find new core-businesses. It was also necessary to solve some complicated problems connected with the transaction with the U.S. Steel. After a lapse of time I can say that I expected these problems be solved more quickly, however, their complicated character made it impossible. I think that the VSŽ management succeeded in fulfilling of its tasks as well as in preparing of new Strategic Targets of the company for the next years. Their aim is to re-organise the operations in our companies according to the branch of business activities to make these companies efficient and investment attractive as much as possible. This would increase the value of the companies and value of the VSŽ a.s. This is my personal target.
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VSŽ a.s. Košice