Important events to report: The announcement on the fine imposed by the Competition Council

Tue, 04/26/2016 - 19:48

Slatina, April 26th – Alro S.A. (BSE: ALR, “the Company” or “Alro”), the biggest aluminium producer in Continental Europe, except Russia and Scandinavia, hereby informs that on April 25th 2016 it was officially served the decision no. 82 from 24.12.2015, by which the Competition Council fines the Company with RON 21,238,718.99, representing 1.05% of the turnover reported in 2014, for an alleged breach of the competition legislation on the energy market on production and trading of electricity.

Company would like to restate its point of view, as previously communicated in the report dated 11.01.2016:

Slatina, 11 January 2016 – Alro SA (BSE: ALR, “The Company” or “Alro”), one of the largest aluminium producers in Central and Eastern Europe, reaffirms its position that the Company had a correct commercial relationship with Hidroelectrica, complying with all the legal requirements that regulate the energy sector in Romania.

The Company took note of the conclusions of the Competition Council investigation regarding the contracts signed with Hidroelectrica, including the sanction imposed to the Company, of RON 21,238,718.99, or 1.05% of its turnover for 2014. Alro didn’t conclude any horizontal or vertical agreement regarding the contract analyzed by the Competition Council.

Alro will take all the legal measures necessary and will act towards demonstrating, once again, that in relation with the energy producer, it acted in full compliance with the requirements in place.

Being a final energy consumer, Alro didn’t resell electricity, but used it exclusively in the Group’s aluminium production process. Moreover, there is no precedent, in the European jurisprudence, regarding sanctions against a final electricity consumer for vertical agreements for market closing via long term contracts.

The Company has a unique electricity consumption profile in Romania, pays in advance for its electricity supply, allowing its supplier access to a guaranteed financial flow to finance its operational and investment activities, without any collateral over its fixed assets and receivables.

Alro reminds the public that these contracts were the object of an investigation conducted by the European Commission (EC) in a file that targeted a potential “preferential electricity tariffs”. After an indepth analysis, conducted over several years, the EC concluded “Hidroelectrica charged prices that were fully in line with the benchmark market price”.

As per the EC press release sent out on June 12th, 2015, “following an in-depth investigation, the European Commission has concluded that electricity supply contracts signed by the state-owned Romanian electricity generator Hidroelectrica with certain electricity traders and industrial customers did not involve state aid within the meaning of the EU rules”. As per a study conducted by the Centre for European Policy Studies (CEPS), the electricity tariff paid by Alro is 4.5 times higher than the lowest price paid by an European company and three times higher compared to the European average.

Alro activates on a highly competitive international market, where some aluminium smelters shut down over the past years, precisely because of unsustainable electricity costs. The Company exports over 70% of its production, and high, uncompetitive prices with electricity determined Alro to shut down 25% of its production capacity.


For further information please contact:

Florenta Ghita

Premium Communication


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Notes to the Editors:

Alro is subsidiary of Vimetco N.V., a global, vertically-integrated primary and processed aluminium producer. Alro is one of the largest aluminium producers in Central and Eastern Europe measured by volume with an installed production capacity of 265,000 tonnes per year.

The main markets for the aluminium manufactured by Alro are within the EU (Hungary, Poland, Greece, Germany and Romania). Alro also exports to the US and Asia. Alro is ISO 9001 certified for quality management and has NADCAP as well as EN 9100 certificates for aerospace production organizations. Alro’s products adhere to the quality standards for primary aluminium on the LME, as well as international standards for flat rolled products.

The contents of the website www.alro.roare not incorporated into, and do not form part of, this announcement.