Business news

Talum expects 20% drop in production and revenue this year

Kidričevo, 29 July (STA) - The Kidričevo-based aluminium maker Talum, which has recently also been focusing on products from remelted and waste aluminium, has operated without disruption during the coronavirus epidemic. Its CEO has nevertheless expects that the company will record a 20% drop of production and revenue this year.

Marko Drobnič has told the STA in an interview that, considering that a shallow crisis had been predicted for the automotive industry as early as the second half of last year, Talum had planned in advance a somewhat lower revenue.

The management has estimated that the company will generate around EUR 60 million less in revenue than the originally planned EUR 325 million. But the company is nevertheless expected to break even at the end of the year.

Drobnič noted that the year had started well, and that March was also good, while the crisis had started to deepen in mid-April as orders had kept dropping, and the prices of aluminium starting to drop as early as in February.

The situation kept deteriorating every month until June, when the company adjusted the volume of production to orders and took advantage of the government measures to protect jobs during the epidemic.

So far, Talum has used EUR 2.6 million worth of government measures and this has helped the company to keep operations in the black, according to the first estimates.

"More optimism on the market can already be felt in July, and there are also more orders," Drobnič said, adding however that September would be the true indicator of the new circumstances of operation and that the true consequences of the pandemic would show only in early autumn.

The CEO noted that the company had saved practically all jobs during the epidemic, and that it did not have to cut labour costs very much. The number of fixed-term contracts was down from 1,519 at the end of last year to 1,486 today.

The company has decided to direct all its investments into the plan to become by independent from the primary products by 2030. The idea is to use the free capacities which are currently available in the electrolysis segments to boost sales of new services.

By 2025, Talum plans that its production is tied to the output of primary aluminium at a rate of 25%, and that all other products are made from purchased, processed or recycled aluminium.

The company is thus boosting its activity in the development of systems for cooling of batteries for electric vehicles, solar absorbers and equipment for heat pumps.