Talum going strong despite unfavourable market conditions
According to him, the conditions on the market last year were largely influenced by China, which produces more than half of all aluminium in the world.
It is true that the price of aluminium on the global market was up because of the environmental measures announced in the last quarter of 2017, but the price of raw material was up even more for the same reason.
Drobnič told the STA he could not speculate on what the decision of US President Donald Trump to introduce import tariffs for aluminium would bring, but he believes that it could result in "turbulences and unpredictability".
The decision will not directly influence Talum's operations, as the group is present in the US only with test quantities of slugs. South America is more interesting for Talum, as it exports around 3,500 tonnes of its products there.
Talum saw a considerable growth in demand last year, which resulted in the production reaching almost 150,000 tonnes. Sales revenues were up to EUR 343m from some EUR 300m in the year before, the chairman noted.
The group also recorded an above-average growth in the production of slugs (almost 20%), and in the production of cast products (almost 30%). "I can assess 2017 as a relatively successful year. Net profit, which amounted to around EUR 1m in 2016, is expected to stand at EUR 2.7m this year."
Talum's strategy has been focused in recent years on increasing the share of revenue from ready-made products and services bringing added value. The key part of the plan are slugs, casts and absorbers, which bring an above-average added value.
Most of the investments are focused on these products. Major investments worth a total of EUR 24m were launched last year due to good results, and Talum plans to make an additional EUR 20m in investments this year.
"We have become the largest European producer of slugs and we control a quarter of the market already. We increased revenue from cast products in recent years from EUR 10m to EUR 25m, and we want to double this number in the next three years."
Germany and Italy remain the key markets for Talum, which exports 85% of its production, but the company sells in practically all European countries. It is also entering the Indian market and looking for opportunities in Russia.
Talum hired additional staff last year and its workforce currently stands at around 1,400. According to Drobnič, wages are above the average, and the company also invests a lot in the education of the staff.
"Situation on the labour market has changed, with demand being considerably higher than a few years ago and exceeding the supply," said the chairman of the company which was declared the best employer of the region of Podravje (NE) last year.
Talum plans to produce more than 150,000 tonnes of aluminium and other products this year and exceed EUR 350m in revenue. Net profit is expected to increase to more than EUR 4m in 2018.