TIRANA, March 9 – One of the country’s biggest foreign investors, Turkey’s Kurum, has filed for bankruptcy in a surprise move which could have severe consequences for the country’s economy and employment.
The huge debts the steelmaker has accumulated and a sharp decline in international base metal prices, in addition to ongoing pollution problems with Albanian authorities, seem to have led the company which employs hundreds of people to initiate bankruptcy proceedings.
Kurum International has been operating in Albania for 18 years mainly in steel production in Elbasan, but recently expanded its activity in Durres Port through a container terminal concession and purchased for small and medium-sized hydropower plants.
In a request filed with the Tirana District Court, Kurum International asks for the initiation of bankruptcy proceedings, the designation of a temporary bankruptcy administrator and self-administration by the debtor company. A court session has been scheduled for March 16.
Kurum has borrowed €106 million from the World Bank and €20 million from the Black Sea Development Bank in the past five years in the only disclosed deals.
Last September, Kurum cut some 200 jobs in its key Elbasan steel plant as international metal prices hit a record low. Metals prices are projected to decline 10 percent in 2016, following last year’s 21 percent drop, due to weaker demand prospects in emerging market economies and new capacity, says the World Bank in its commodity markets outlook report.
Kurum is the largest employer in the city of Elbasan, central Albania, which suffers high unemployment rates and high pollution levels because of the plant’s operation. The steel plant has been continuously criticized by environmentalists protesting the company’s dangerous waste disposal in river banks and its failure to activate its filters even after their installation, making Elbasan Albania’s most polluted city with a rising number of environmental-related diseases including cancer and genetic mutations.
In 2013, Turkey’s Kurum acquired four small and medium sized hydropower plants for €110 million and was awarded a 35-year concession contract to manage the container terminal in Durres Port, the country’s biggest
Established in 1999, Kurum International Albania, a subsidiary of Turkey’s Kurum Group, is the largest steel producer in Albania with 70 percent of the country’s market share, manufacturing and selling a variety of hot-rolled construction iron products in Albania, the EU and the Balkans. The company is also involved in the production of liquid oxygen, lime and in boat construction and dockyard repair.
