Annual Reports

For Slovalco, 2021 was a year of several challenges.

In the area of safety, health and environmental protection, Slovalco did not record any accident classified as LTI (lost time injury) or serious leakage of hazardous substances during the period under review. In terms of emissions of harmful substances into the environment, Slovalco has long been well below the limits set by Slovak legislation. However, at the beginning of the year under review, we recorded one incident with a high-risk potential. It is a confirmation that we must always stay alert, stop, and check for possible risks, even in seemingly simple activities. The goal of our daily work in the field of health and safety and the environment protection is communication, constant explanation, and the effort to create an environment of permanent vigilance. It is important to build an awareness to be careful, positively suspicious, and foresighted about the potential risks in performing any of our activities. Thanks to this approach, staff discipline and understanding of the context, we have also managed the challenges related to the COVID-19 pandemic very well.

From the point of view of technology operation and process stability, we have been proving our capabilities and competencies for a long time. We have a quality, reliable and professional team of people in technology, maintenance and logistics in all support processes. We operated all technological units maintaining a high level of all relevant parameters, permanent process stability and with an emphasis on quality of products for our customers. We had challenges ahead of us, we had to adapt smoothly to changing inputs in terms of raw material quality, energy regulation or management decisions. We have proved to ourselves, to you, our shareholders, customers, suppliers, the environment and institutions, that Slovalco is firmly one of the best plants in the world with this technology. In the long run, it is excellent in the achieved technological and qualitative parameters of production with very low emissions of substances discharged into the living and working environment. On behalf of the company’s management, I would like to thank all employees for their work, professionalism and a peaceful creative atmosphere in the teams.

The evaluated year 2021 was challenging in terms of rapidly changing influences in external markets. This concerned not only commodities, energy, CO2 allowances, but also political decisions, many with an economic impact. These influences have been significant for us in making fundamental managerial decisions and creating plans and objectives, albeit for a short period of time. As Slovalco’s long-term electricity supply contract expired in December 2021, we purchased electricity for the agreed production volume for 2022 in the middle of the year. This way Slovalco extended the time and space needed for further negotiations on a long-term electricity supply contract.

In connection with the growth of the prices of energy or CO2 allowances, together with the management of other Slovak plants which belong to energy-intensive industry, we have developed an initiative to use support mechanisms for such companies based on EU legislation. Supportive compensation mechanisms and their benefits are used by our competitors from European countries based on the decisions of their governments, which helps them to survive the challenging period of faster growth of input and energy expenses in comparison with the revenue growth. This disparity puts energy-intensive factories in situations where they find themselves in serious existential problems through no fault of their own.

Despite enormous efforts to influence the government and parliament, it has not been possible to achieve an amendment to the law that covers this issue. I still believe that we will be able to convince government officials that highly environmentally friendly and efficient plants, such as Slovalco, are a long-term benefit for the country. And I still believe that we will also succeed in obtaining help through the compensation schemes achieved by the change in legislation.

The coming year ahead will be about our readiness. Readiness to negotiate the future of the factory and its employees, readiness to use their great potential, together with the opportunities that the market will offer us and the ones brought by changes which are difficult to predict.

Milan Veselý

Chief Executive Officer