Třinecké železárny win lucrative contract worth 15 billion crowns

Třinecké železárny, photo: Qasinka / Free Domain

The Třinecké železárny steelworks has won a lucrative contract worth 15 billion crowns for a project of railway route construction in Azerbaijan, the company’s CEO Jan Czudek revealed on Wednesday after a visit by the Czech head-of-state Miloš Zeman. The president reportedly helped seal the deal during a recent visit to the former Soviet country.

Třinecké železárny,  photo: Qasinka / Free Domain
Firms within the Moravia Steel - Třinecké železárny group are already taking part in a project repairing a railway route via Azerbaijan, the steelwork’s spokeswoman Petra Jurásková said. Some 300 kilometres have been completed, she added, while another 600 kilometre stretch is being worked on now. The Czech president has promoted the continuation if a section leading through rugged mountain terrain to the border with Iraq. On Tuesday, the company management today acquainted President Zeman with the history and future of the company as well as with its investments, both past and planned, the head of production Česlav Marek confirmed. The company will reportedly invest 11 billion crowns over five years. According to the Czech News Agency, the company invested almost 23 billion crowns, 6.9 billion of which went to environmental projects. The company claims it meets all environmental limits but according to reports nevertheless ranks among the biggest pollutants in the region. Třinecké železárny netted 3.048 billion crowns last year, almost three times more than in 2013. Its sales grew by almost 2.5 billion crowns to more than 38 billion. The company employs more than 6,900 people. Its output last year reached 2,540 kilotons of steel. Almost two-thirds of its output is exported abroad. Třinecké železárny is the sole shareholder is parent company Moravia Steel of billionaire Tomáš Chrenek.

Oil and gas rich Azerbaijan has a formidable trade surplus with the Czech Republic. Last year its exports surged to value 39 billion crowns, up from 26.9 billion crowns in 2013. Czech goods going in the other direction came to 2.4 billion last year, down by around a billion crowns from the 2013 level. Oil is the overwhelming factor in business relation, around a third of the Czech’s still substantial consumption of oil is supplied by Azerbaijan. Zeman reflected the fact with a tour of one oil terminal. More generally, the EU, which also runs a big trade deficit with Azerbaijan, has been able to shrunk the deficit over the last three or four years. But low worldwide oil prices for Azerbaijan threaten its flow of orders for foreign firms. The country’s 2015 budget was based on an oil price of US 90 dollars a barrel. For most of the last months it has been around two-thirds or around half that level.

The Czech president joked at the end of his official visit that any of the Czech businessmen who did not bring back contracts from Azerbaijan should commit suicide. Tangible business results of the official trip are now beginning to crop up – so some can breathe a sigh of relief.

Other firms interested in business there include the Czech aircraft producer Aero Vodochody made a big play to land orders for the new generation of its L-39 training jet. The firm has some advantage from the fact that 24 of the older L-39s are already in service in the country with Aero Vodochody providing general maintenance and repairs. Aero already has around 20 firm orders for the new model and has a target for producing around 25 aircraft a year if a solid volume of orders can be built up.