Good news sometimes comes from the most unexpected of places
Chris Wells takes a furtive flick through what the world's English-language press is saying about Poland
India is not the first country you would consult if you wanted to find out more about what's going on in Poland, but that's where we're heading for in this week's World Media Watch. India's Economic Times, an offshoot of The India Times, ran a story which should be familiar to most readers: that of the LNM Group's purchase of Poland's steel producer Huta Stali S.A., from the Polish government.
While many western publications reported that the draft agreement had been reached, The India Times gave much more background on exactly who the purchaser is, as well as an indication of what the four steel plants that make up the Huta Stali operation might expect once the deal has gone through.
The LNM Group is headed by Mr. Lakshmi Mittal who, as The Economic Times proudly says, is a London-based Indian steel tycoon and the richest Asian in the UK. Over recent years, his group has been buying up troubled steel plants across the world and, it appears, turning them right back around again. The article listed LNM's achievements in Kazakhstan, where its plant there now produces twelve percent of the group's total output, and the Romanian producer Sidex. LNM bought this rusting state-owned steel mill in 2001 for $360 million. It had debts of around $160 million and no cash-flow because, incredibly, most of its sales were conducted by barter! In just two years, and with the help of a $100 million loan from the European Bank for Reconstruction and Development, Mittal ended the barter trade, doubled capacity, and now - according to Sidex's managing director - the plant should turn a profit this year.
The LNM Group is the world's second-largest steel producer, with production facilities in twelve countries and sales expected to exceed $12 billion in 2003. With the experience it already has in other former communist countries, the portents augur well for Huta Stali. The next step is to start discussions with the unions over the social package, given that layoffs will ultimately be necessary in order to turn Huta Stali around. But at this stage, it seems that the Polish steel producer may end up in relatively safe hands.
In the meantime, and in India at least, LNM's continued rise adds more fuel to the feel-good-factor fire. An editorial in the same issue of The Economic Times was so upbeat as to have been almost in the stratosphere. As soon as editorials in any paper start to use phrases like "staggering comeback", you just know that someone, somewhere, is making money again. The author included Poland (and Botswana!) in a list of emerging markets that are taking off for investors, as predicted returns keep getting revised upwards. So whatever you read in the local press, it's nice to know that others are saying that things are looking up.
