Polish steel industry: “era of naïve globalisation” is coming to an end
Polish steel industry is urging Prime Minister Donald Tusk to follow through on his recent promise to “repolonise” the national economy, and authorities to publish the eagerly-anticipated national steel plan.
Earlier this month, Tusk said the “era of naïve globalisation” is coming to an end and that the government, rather than observing passively, would take a more active role in supporting the national economy. This will include measures such as mandating state-owned firms and projects to choose domestic contractors and suppliers. It will also mean supporting the conversion of some plants to produce military equipment.
Poland has a high share of state ownership in the economy. One of these assets is now plate producer Huta Czestochowa (HCz), which is in the process of being acquired by the defence ministry. Tusk said the move has been made to rescue the steelworks from the troubled ownership of Liberty, but also so that Poland’s army and defence suppliers have raw materials supply. State-owned assets will focus not only on profit but also long-term public interest and economic security.
Tomasz Slezak, chief executive at state-owned Weglokoks, currently operating Huta Czestochowa, stresses Tusk’s comments do not spell nationalisation of industry but rather mobilising business to act in the interest of national security.
“We know that, as a rule, private businesses are better run [than state firms], so [nationalisation] is not a good direction to go in,” he said during last week’s European Economic Congress in Katowice attended by Kallanish. Prime Minister Tusk simply wants to ensure that Polish businesses benefit.
Globalisation previously served the interests and prosperity of the West but has ended with technology being transferred to the rest of the world and with huge costs for Europe, he added. “I have the impression that everyone in Europe has answered the question, we need industry. Even if it’s due to the threat of war, we need the steel industry,” he noted. In Europe, this push has happened slowly, but it will dictate future economic direction, he added.
Stalprofil chief executive Henryk Orczykowski said repolonisation is a “media slogan”, which in fact means protecting what is Polish and local jobs. He added: “My heart, as well as probably the heart of many businessmen has been filled with hope … Prime Minister, do as you say! Put it into action.” Even if the measures are only 50% effective, there will be relief for business in the form of deregulation, market protection and energy, he noted.
Asked whether HCz can satisfy the needs of Poland’s defence industry, Slezak said it can satisfy a portion and aims to increase this.
Przemsylaw Sztuczkowski, ceo of Cognor, which owns Huta Stali Jakosciowych (HSJ), another steelmaker serving defence, said he was more optimistic, claiming Polish industry can meet defence demand. HSJ already supplies plate for Polish tank production and the Polish army recently placed a new order.
Orczykowski warned of the importance of indigenous steel production to national security. While importing steel components during peacetime is fine, “if war really does break out on our territory, everyone will look after their own – no one will supply that to us,” he said. The state must therefore have an influence over this production, as well as over who builds the critical infrastructure required to ensure society functions, he added.
Since all parties are agreed that steel is critical, measures are now required to support the industry, said Polish Steel Association (HIPH) ceo Moryslaw Motyka. State aid should be extended to greenfield steelmaking projects to, for example, ensure supply of hitherto not produced types of steel for defence. CBAM must be extended to cover steel-containing goods, and an EU safeguard replacement is needed, he added. Energy costs must meanwhile be below €60/MWh.
The Polish government has drafted a national steel plan, which it plans to publish imminently to invite consultation from industry, said Grzegorz Jagielski from the Polish industry ministry’s mining and metallurgy department.
Sztuczkowski, who was involved in drafting the document, urged the government to forget about further consultations and immediately implement the measures outlined. “We drew up … a very good document, in my opinion. A document which absolutely includes all the proposals that should be realised … There is absolutely no time left for consultation.”
Adam Smith Poland
