site.btaNovember 5, 1963: Kremikovtsi Iron and Steel Works Goes into Operation

The Kremikovtsi Iron and Steel Works northwest of Sofia went into operation 62 years ago, on November 5, 1963.

Bulgarian geologists discovered large iron ore deposits with traces of barium and lead near the then village (now quarter) of Kremikovtsi in 1955. At its April 1956 Plenum, the Central Committee of the Bulgarian Communist Party adopted a decision on the construction of a metallurgical plant at that location. The development of a metal industry was part of the government's efforts to industrialize the country and perform a "Great Leap Forward" akin to that underway in the People's Republic of China at that time. This argument prevailed despite experts' warnings that the facility would pollute the air and contaminate Sofia's drinking water. Other arguments against the metal works were its whereabouts hundreds of kilometres away from the country's main ports and the low-grade iron ore available in the area. Despite all these caveats about the project, the Kremikovtsi Iron and Steel Works went under construction in 1960 as a Bulgaria-USSR joint venture.

The operation was inaugurated on November 5, 1963, and the first coke and cast-iron production facilities were put into operation. The production of sinter began in 1964, and by 1969, the output of the enterprise had diversified into electric steel, converter steel, ferromanganese, hot-rolled sheet metal, electric welded pipes, cold-formed sections, seamless pipes, and concrete reinforcement bars. During the 1970s, mills and workshops were set up for manufacturing cold-rolled sheet metal, hot-dip galvanizing, tinplate (white iron), and plastic-coated sheet metal (metal plastic). The iron and steel works created 35,000 jobs, which were filled by people from all over Bulgaria. 

Since its establishment, Kremikovtsi has been a money loser, relying on substantial state subsidies to survive. Its production capacity far exceeded domestic demand, and the low-grade rolled products it manufactured had little to no demand on foreign markets.

In 1989, the combined works produced a record 1.6 billion tonnes of steel. Then it started to run up huge debts and was blacklisted by the IMF, which demanded its privatization. In 1999 Kremikovtsi was sold for USD 1 to Daru Metals, subject to the condition that the buyer would cover the USD 640 million debts. In 2006 the works changed hands yet again, being acquired by Indian businessman Pramod Mittal. The facility continued its downward slide and went deeper and deeper into debt. By mid-2008 the company was no longer able to service its debts and filed for bankruptcy. In December 2008 most of the works was practically out of service, and payment of wages and gas supply stopped, triggering workers' protests. Natural gas supply was switched off on May 15, 2009, and operation of the coke plant ceased irreversibly. On May 31, 2010 the company was adjudicated bankrupt and went into winding-up, with debts exceeding BGN 2 billion. 

Following is the original English-language coverage of the enterprise's inauguration in the BTA External Service:

"First Shops of Kremikovtsi Works Inaugurated

Sofia, November 5 (BTA) - The first five major component plants of the Kremikovtsi Metallurgical Works, the biggest construction project of the Fourth Five-Year Plan, were officially inaugurated on November 5, 1963. A multitude of workers and experts, Soviet experts helping in the construction of Works, and guests from the Capital had assembled in the square in front of the main buildings to attend the inauguration of the pre-fab structures plant, the machines-repair plant, the thermoelectric power station, the first coking battery of the coking plant and the first blast furnace.

With continuous applause and cheers, the thousands present greeted the appearance on the rostrum of state and party leaders headed by Todor Zhivkov, First Secretary of the Central Committee of the Bulgarian Communist Party and Chairman of the Council of Ministers, and of the members of the official Soviet Delegation for the opening of the Works, led by Soviet Ambassador to Sofia N. Organov. Guests to the ceremony were also heads and members of the diplomatic missions accredited to Sofia.

Engineer Emil Chervenyakov, the representative of the Council of Ministers at the construction site and Deputy Minister of Building, read an account about how the construction of the Works was proceeding. He said that the Kremikovtsi Metallurgical Works, which is to be among the biggest of its kind in the Balkans, was to turn out, on the completion of the first stage of its construction, over one million tons of cast iron, over 1.2 million tons of steel and one million tons of rolled iron. Upon its final completion by the end of 1980 the capacity of the combine will reach 3.5 million tons of cast iron, 4.4 million tons of steel and 3.2 million tons of rolled iron per annum, and would meet the country’s basic needs of ferrous metals."