"Only RTB Bor turns stone into dollars"

"Only RTB Bor turns stone into dollars"

CEO of this company Stanko Popovic says that for the last three years they had employed 600 new employees, and that they intend to continue with this trend given that he plans the same as in 2015, or even greater growth in the coming year. This means that he will increase profit in two year time for more than 50%. He revealed in this interview what he thinks about economic situation in the state, especially how he sees the future of Mining and Smelting Basin (RTB) Bor and its chemical complex.

- Yet another year has gone by, how was it for your company, what were the biggest challenges you had faced with?

Last year was especially favorable for our business, with lots of business plans coming true.

We had launched two new products. One in the revitalized factory facility in Elixir Prahovo, Mono-calcium Phosphate – “MonoFos“- an essential feed additive. We are the first producers of such product in the region, while it was being imported from Russia, Finland and Tunisia, before we launched this facility in Prahovo. Nowadays, apart from satisfying the needs of local market, we successfully export this product on the markets all over Europe.

The second product – “Super Start“- micro-granulated start-up fertilizer is produced in the factory Elixir Zorka, by implementing most innovative technologies. Elixir Zorka is among few factories in Europe that deals with such kind of production. Launching production and placing these two new products on the market had marked this year within our company.

- Business data show that you plan profit amounting to EUR 11 million in this year, do you expect this goal to be achieved?

Yes. We expect EBITDA of around EUR 18.5 million for 2015, which is around 25 percent more than last year, and we expect it to be some 25% less compared to 2016.

In 2015, we will generate consolidated income amounting to app. EUR 180 million, while more than 50% is being realized by exporting our products.

- How much of your products are being placed abroad, in which countries, and do you intend to open up to some new markets?

Elixir Group generates more than 50% of its overall profit by selling our products to the markets abroad.

The biggest part of exporting potentials is complex mineral fertilizers, Mono-calcium phosphate, phosphoric acid, frozen fruits and vegetables. 50 % of produced complex mineral fertilizers are being sold in 16 European countries. 80% of Mono-calcium phosphate is sold on the European market. The plan for opening up new markets is meant for North Africa and South America.

Frozen fruits and vegetables, in which structure raspberry as a national brand participates with 55 percent, is being completely exported abroad. Apart from the markets of West Europe, where our fruits are being placed since 2007, we also export it to Australia, USA, Japan and Russia. - Data show that the number of employees significantly increased in this year, nearly for 200. Why do you need to employ additional workforce?

For the last three years, we had employed around 600 employees of diverse qualifications. We had employed lots of engineers, economists, operators, as well as production workers that were essential in the newly opened factory facilities.

Given that our development plans for achieving new products are rather ambitious, upon fulfilling them, we will hopefully employ new workforce.

- What are your plans for 2016, in the sense of investment, business results, or possibly new employment opportunities?

As in previous years, Elixir Group has ambitious plans for 2016.

We had planned growth of capacities for the production of complex mineral fertilizers, by launching new factory facility. As for Mono-calcium phosphate, we plan to double our production compared to the previous year, with improvement of production process on the existing production line.

Development potentials in the higher stages of processing of phosphoric acid are huge, and the possibility of independent control of the composition of phosphoric acid as main component of the product represents the key to success, that is being reflected in the quality of the final product. Development route of Elixir Prahovo is oriented towards further purification of phosphoric acid and the production of corresponding salts of technical, both feed and food, quality.

Moreover, in 2016, we plan to launch the construction of facility for production of potassium sulfate in Elixir Zorka.

- You had announced new smelter in RTB Bor to be very significant for the economy of the country on the whole, and for your company, that will provide production of raw materials. The smelter was launched but there are no favorable news coming from RTB Bor on its business operations. Does this have a negative impact on you, and whether you established good cooperation with Bor basin?

We had achieved exactly what I had announced.

RTB Bor had successfully launched its new smelter at record short notice compared to similar facilities in the world. In India, for example, such facility was being prepared for almost two years.

Production of sulfuric acid is increased four times, which is proportionate with reduction of releasing of sulfur oxide into the atmosphere.

Utilization of copper and gold from ore had increased for 5 percent. Productivity is growing, and the production costs reduced per cooper ton. Those are all favorable news which could have only positive impact on the management of RTB Bor.

What we could not influence, as well as any other management in the world, is the price of copper that dropped on the world stock market from USD 7,000 to USD 4,500.

I am familiar with the fact that current cost price of ton of copper cathode in Bor amounts to USD 5,000, and that they implement the plan for cost reduction to USD 4,500, in order to prevent generating losses from business operations. You have to take my word that those are excellent results, as large number of mines in the world has higher cost price per ton of copper cathode than RTB Bor.

We can discuss the issue of RTB Bor and its usefulness for the economy of Serbia and its potentials rather extensively.

Cooperation between RTB Bor and Elixir Prahovo is correct and our connecting points are sulfuric acid that we take over from Bor, which allow us to work smoothly, solving the problem of by-products, while we secure one of the components for the making of phosphoric acid. - Had the results your company achieved recommended you for Annual Award of Serbian Chamber of Commerce, and what does it mean to you?

I suppose so. The Award pleases us, but it also obligates us to continue with development and innovations in the years to come.

- Prime Minister had also talked about the big problems of RTB Bor and the potential change of ownership structure. How would this scenario affect your plans?

Production facilities for producing phosphoric acid in Elixir Prahovo used to represent part of technological chain of RTB Bor, where sulfuric acid was neutralized, i.e. phosphoric acid was produced. Since 2012, Elixir Prahovo operates as an independent company within Elixir Group.

The problem of Bor which is still present today is the problem of all copper mines in the world. Producers of zinc, iron, coal, oil and gas are facing with similar problem. This is not an isolated problem of RTB Bor but overall field of non-ferrous metals on the international level. This is, according to my opinion, only a wave that is normal, already seen in the previous years, and that will soon pass. This is a test for the strongest companies and the opportunity for this field to restructure, so that some big acquisitions are being realized on the international level, and the price of copper will surely gain its previous worth, as the low level price was not sustainable in the long run. Under this, I mean the cost which is, for major part of producers of copper, below the cost price.

The change of ownership structure, that is to say, the introduction of owner or co-owner of RTB Bor or co-owner that has financial means to continue with investment in opening up new reservoirs of copper and gold ores, would be good news for Bor, for Elixir and for the economy in Serbia in general.

Overall potential of Bor with a new smelter is 80,000 tons of copper on annual basis, and 2 tons of gold, as well as smaller quantities of platinum, which could bring total revenues amounting from USD 800 million to USD 1 billion, depending on the copper price. I would like to remind you that few years ago, copper price amounted to USD 10,000 per ton of copper cathode.

When we talk of this number, you should regard it in a different way compared to the companies such as Steel Factory in Smederevo and FIAT automobiles. Those companies are both importing and exporting companies.

Bor is net exporter, and it turns stone from the earth into dollars. By bringing investor that will recognize this and who will be willing to make investments, would be great news for Serbian economy.

Under such circumstances, as for Elixir, the reliability of RTB Bor as our partner and supplier will additionally strengthen.