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The government has saved Dunaferr with the active involvement of the Ministry of Economic Development.
In its statement sent to MTI, the Ministry added that Liberty Steel’s winning bid is an important milestone, but the hard work is yet to come. Due to the irresponsibility of foreign management, misguided sanctions and the energy crisis, by the end of 2022 Dunaferr was insolvent, the factory’s operation was rendered impossible and the security of jobs of thousands of workers was endangered. The state of the plant seemed irrecuperable from which the successful recovery was unprecedented in Hungary, they wrote.
Photo: Facebook/LIBERTY Steel Group
According to the statement, Dunaferr is a key player in Hungarian industry and employment, and the steel industry is a strategic sector that is a top priority for the government, so
the Ministry contributed to the rescue of the plant by, among other things, drafting legislation and establishing coordination between the parties.
The government set up a safeguard committee and Dunaferr was put into liquidation on 14 December 2022, a procedure that created the legal framework necessary for the plant’s survival.
The company was taken over by the Donbass Industrial Association in September 2004. After several failed buyout attempts, Dunaferr went into liquidation last December because it had struggled to keep operations running. Among the causes were a shortage of coking coal, a shutdown of its smelters, and considerable debts.
They added that, in the last seven months, the government, the liquidator, the region’s MP Lajos Mészáros and Dunaferr’s employees have made extraordinary efforts to save the plant. In order to keep Dunaferr afloat,
a wage labor scheme was set up, allowing the coking plant to continue operating, and the blast furnace and rolling mills shut down last November, to restart.
This process has been significantly helped by the extension of the wage guarantee: the government decided, on the proposal of Lajos Mészáros, to provide 16 billion forints (EUR 42.5 M) in aid to pay the wages of more than 4,000 workers over a six-month period, so that the workers and their families, the lifeblood of the ironworks, are not put at risk.
As a next step in the process, the assets needed for steel production were transferred to new companies, Dunarolling Dunai Vasmű Kft. and Duna Furnace Dunai Vasmű Kft., put out to tender by the liquidator through an open procedure. In the sale, which closed last Friday,
a valid and winning bid was submitted by Liberty Steel, which had already rushed to the rescue of the plant in December at a time when the steel industry was going through its most difficult period worldwide,
they stressed.
The successful sale of Dunaferr is an important milestone, but it is just the beginning of the hard work. The government is committed to a green transition that is paramount for the future of the steel industry. The plant’s operations need reorganization and significant improvements are needed to produce higher value-added products, modern 21st century technology and green steel.
The Ministry, on behalf of the government, will continue to fight to protect the factory, jobs and families, at the same time ensuring that no bureaucratic obstacles stand in the way of Dunaferr’s rescue and revitalization,” the statement said.
Featured image by Zsolt Németh, via Facebook/ISD Dunaferr Zrt.