Celsa, a Catalan industry under the threat of financial speculation, by Felip Puig

On Friday at noon I was surprised, like many Barcelonans, by a major traffic jam in the city center, hours before the usual weekend operation. They were Celsa workers, defending their jobs and demonstrating in front of the headquarters of a European financial institution.

Celsa is a family business with more than 50 years of history and is present in 8 different countries, with more than 120 production centers, which today generates more than 10,000 direct jobs, of which 1,500 in Catalonia, and close to 70,000 indirect. Celsa Group is the first producer of circular and low-emission steel Europe, recycles more than 8 million tons of scrap, and produces about 7 million tons of steel in electric furnaces, which are 9 times less polluting than traditional blast furnaces.

It is the first private industrial group in Catalonia, the first Catalan company with local capital in terms of turnover, and represents 2.5% of our industrial GDP. Submitted to a major financial restructuring plan after the 2008 crisis, it has had to face a 20% drop in sales in 2020, because of the covid pandemic, and now it is suffering from the increased energy costs. Even so, in 2021 it has achieved the best turnover in its historyabove 5,000 million euros, 25% higher than 2019.

Celsa has good prospects for the future, with a commitment to reinvestment of your profits, and with the will to clean up your debt. Why, then, this protest of its workers, and why against foreign investment funds?

It turns out that Celsa has achieved a credit of 550 million euros from European fundsthrough SEPI, to meet its financial commitments, and undertakes to return the aid in seven years, not to distribute profits and reinvest them in the company, and to contribute 50 million euros in a capital increase for the partners.

But for the formalization of European aid, it needs the agreement of the creditor funds, which in 2018 bought their debt from the banks… with a discount of more than 50% of its value. And these funds, which have not invested anything in these last 3 years, which have been charging each year, they want to recover 100% of the debt they bought by paying less than half. The granting of the new aid requires, logically, to equate in the balance of the company the nominal value of the debt that they bought from the banks to the real market value that the funds paid.

They do not have enough with the return on investment (and their interest) that they paid to the banks, with a discount of more than 50%, but instead demand 100% of what they did not pay, and also control the company and its Board of administration.

With this requirement, the creditor funds, a large part of them of a speculative nature, put at risk one of the most important industrial companies in the country. It seems logical that these funds also they have to share sacrificesand even more so if they have not paid even half of the debt that they now claim in full.

The dilemma between the real industry and the financial economy has to be resolved in favor of Celsa and its continuity. An industrial society like the Catalan one, with more than 98% of small and medium-sized companies, also needs large companies like the ones we have in sectors such as the steel, automotive, chemical, pharmaceutical or agri-food industries.

Our industrial, tourist, logistics and services vocation needs large companies and industries rooted in the country, such as Celsa, which offer jobs to thousands of supplier companieswhich are committed to the circular economy, the reduction of emissions, export and internationalization.

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Now that we are beginning to relocate companies and industries that are returning to Catalonia, it would be very paradoxical if the financial engineering of speculative funds, which have never known the commitment and sacrifice of creating, maintaining and growing manufacturing industries, would prevent companies like Celsa from being able to recover its competitiveness, guarantee the continuity of thousands of jobs, and continue contributing to the sustainability and viability of our country’s economy.

Investing in funds and financial products, which seek returns on their industrial investments, is not only legitimate but can help contribute capital to business projects. But heFinancial speculation has to share the sacrifices in times of difficultyand adjust their expectations, especially when they do not share losses, but rather, at most, have to moderate their profits.

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