Polish Steel Industry
Few facts and brief
history
Why?
•
Metallurgical industry was mainly developed close to coal mines. And we do not refer
here to hard coal, but to coked plant ore, with very high caloric parameters. Steel
production requires high temperatures, which are kept by burning coke. The ore,
which is a resource used for steel production, was imported from Sweden (Kiruna),
Russia and China. The development of this industry in the 20th century was
determined by fast development of all machine industries, roads, ship building etc.
Currently it should be admitted that there exist a lot of materials replacing pure steel
form, e.g. aluminium, duralumin, or materials made of chemical compounds or resin.
However, there still exist many fields where steel is indispensable, and that is why
steel industry is still developing, e.g. in 2006 world production reached over 1 million
tons, which is a 1000% increase within the space of 100 years.
Why?
Iron ore
Pre-1991 map
showing Kiruna
Mining ore in ,,old
times”
Where?
Katowice Steelworks
Sendzimira Steelworks
– interior and exterior
Pros and cons of public
metallurgy industry
•
Nowadays it is hard to talk about any positive aspects of public metallurgy
industry, due to the fact that this kind of ownership is slowly disappearing in
our country as well. For example, National Treasury sold recently 27% of
CMC Zawiercie Company’s capital, which is the third biggest steel producer
in Poland. Earlier in the year 2003, Ministry of Economy sold 71% of stocks
of previous Huta Zawiercie to the private Swiss firm, which caused National
Treasury to lose its control package. As can be seen, the continuous
privatization of this sector takes place in Poland. What is more, Ministry
decided to support financially only 6 out of total 40 public ironworks and that
will make their managers look for other sources of money.
+Better possibility of controlling iron production rate during state of
national emergency
- Public companies easily fall into debt
- Inefficient, cause loss of tax-payers money
Pros and cons of public
metallurgy industry
Polish mine
Miners during a short break
Why did some countries
return this industry to the
private sector?
• The major reasons are definitely minuses of public ownership, which
were mentioned previously. In Poland public management is usually
highly incompetent and that causes big debts in companies. Later
they can be only saved by large sums provided by private investors,
who will simply pay the loan-holders. Moreover, business-people can
find clients more easily, introduce higher salaries and in that way
employ better-qualified staff, which improves both production rate
and quality followed by higher sales. The state itself cannot afford
such policy due to the fact that extra financial support of one sector
would naturally mean less money for another, whereas a better
earning business-person simply pays higher taxes. In that way
National Treasury gets benefits from private ironworks without taking
the responsibility of its loses or other economically dangerous issues.
• To sum up, steel production and coal mining rates are no longer the
measures of country’s level of industrial development and they are
no more vital to a state’s economical security.
Other major questions
Is there still government intervention?
•
Despite previously mentioned matters government intervention unfortunately still exists. As
it was mentioned at the beginning, Minister of Economy promised in his official statement
from 07.03.2006 to financially support six steel companies. Such steps taken by authorities
have their source in the privileged workers position in Polish People’s Republic. Because of
that we still have a strong lobby (in mining industry as well) which forces government to
pay for companies in debt and to postpone their privatization. It is a pity that most of the
society does not understand that process. Fortunately, states interventionism takes only
form of donations.
What form does it take?
•
Nowadays steel industry is being restructured, so we witness continuous decrease in
employment. This fact is connected with the fast development of our economy in which
services are taking the dominating position.
The decline [or rise] of steel / coal industries - considering output trends, employment and trade
patterns in these industries.
•
In the coming years, steel products will remain in high demand both on the external and
internal markets; for example they will be needed in car, building and electric industries.
Impact on economy
•
•
•
Katowice Steelworks in Silesia and Sendzimira Steelworks in Krakow were always
important centres of steel production because of their location and great production
potential. During the socialist realism period they used to be a model example of
Polish technical thought and the symbol of Poland’s position in Europe. They were in
financial difficulties from the eighties to the nineties, and privatisation in 2004 enabled
further development of both steelworks. Steel demands have been challenging and
changing with the times, so steelworks had to adapt to those modifications. Production
of new types of steel, technological regime and intensive competition in the whole
Europe forced new owners to modernize the production and improve the quality of
produced steel. Actually steel production is on the increase, and the odds are that this
trend will continue.
Katowice and Sendzimina Steelworks (now both owned by Mittal Steel) are still
strong points of European steel production and are numbered among the biggest
industrial centres. They employ over 20 000 people, plus over 100 000 employees in
cooperation.
Steel production is still profitable mainly because of great market demand, and the
fact that raw materials from carbon and iron ores are still quite easily available.