The management of Cuprom Romania, the only local copper maker, which saw insolvency procedures open against it at the end of last year, does not know at this moment whether the company will survive the shock of the international crisis or not.
"Cuprom can be profitable at 9,000 dollars per tonne of copper, at 5,000 dollars and at 3,000, as well, that is not the problem. Cuprom cannot take system shocks and what happened last year was a system shock that happens once in a century. The price of copper fell from 9,000 dollars per tonne in September to 2,700 dollars per tonne in December. Had it happened over a year and a half, then it would not have been a problem," Horia Simu, chairman and main shareholder of Cuprom told Ziarul Financiar.
He says that the company had stocks bought at high prices before demand and prices on the market plummeted, which caused the company’s problems.
These are the first explanations provided by the businessman since the company went insolvent in December 2008. Horia Simu does not sound very optimistic about the fate of the business that turned him into one of the biggest entrepreneurs in Romania. Cuprom witnessed a fast-paced development in recent years, so that from 22 million-euro business in 2003, when it was established, it reached 277.7 million euro turnover in 2007, the last figure provided by the company’s management. The growth, however, was funded with tens of millions of euros in loans taken out from banks that were needed to upgrade Cuprom’s factories.
Going insolvent was the only solution to prevent some of the banks from withdrawing their lines of credit.
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