History

The Company started its operations on 1 July 1992 as “ZPH Stalprodukt S.A.” – Metallurgical Processing Plant. It was based on two production departments of the Kraków Sendzimir Steel Works existing in Bochnia. Its initial capital amounted to PLZ 2.6 billion (after denomination – PLZ 260 thousand). The successive share issues led to the increase of the shareholders’ equity and to fast strengthening of the Company’s market position. Thanks to the increased crediting capacity the Company gained an additional source of investment financing, which enabled the expansion of the plant and its production capacity.

Investment projects implemented since the beginning of Stalprodukt operations, have become an inseparable element of the Company’s development strategy. In the initial period of the Company’s operations, they were directed to the expansion of the production capacity, expansion of the product range offered and introduction of efficient energy and materials saving technologies, which contributed to the reduction of production costs.

In the mid nineties the Company made an enormous financial effort deciding to buy the previously leased property: land, fixed and current assets. The undertaking was financed with funds obtained from the operations and incurred credits. At the time, the Company had already enjoyed the status of a modern, competitive enterprise and earned a good reputation for financial liquidity and reliability in banks and among customers.

The crowning of the mutual efforts made by the employees and the Board was the Company’s listing at the Warsaw Stock Exchange, which took place on 6 August 1997.

The years 1997-1999 were the period of the Capital Group formation. As a consequence of this process new entities were established, mostly limited liability companies with 100-percent Stalprodukt’s participation.

In the same period the construction of the distribution network was started in order to market our products – mostly cold formed profiles. The first stage of the construction lasted from 1997 to 2002 and resulted in the establishment of the distribution network in the territory of the entire country. In 2002 the network took over almost fifty percent of sales of sections produced by Stalprodukt.

In 1998 another 20-roll Sendzimir mill was put into operation. It had been bought in order to increase the production capacity of electrical sheets by several thousand tonnes annually and improve the quality of rolling. The investment also enabled the introduction of new flat steel sheet types into the production process.

In 1999 the Cold Formed Profiles Department in Bochnia was expanded and a slitting line for wide strips was launched. The launching of the IFS Applications system was a big step towards modern company management.

In mid 2000 a galvanizing plant, built in cooperation with the ZGH “Bolesław” Mining and Metallurgical Plant, with Stalprodukt S.A. 51-percent participation, was opened in Bukowno. This investment had an impact on the sales channels of road barriers produced by Stalprodukt.

In successive years the IT infrastructure was consistently developed. In the first half of 2001 a data warehouse was launched to allow for a multi-dimensional analysis of the production process, sales and warehouse operations. At the same time the IFS Optima Controlling component was launched to enable the generation of financial reports, conducting the ratio analysis and assessment of company achievements on the basis of data acquired from the accounting component. Other functions of the component are budgeting and production costs analysis. In January 2002 a new personnel management system, developed by the Polish DST company, was introduced to take over the entire staff and payroll services in the Company.

The most important undertaking, implemented in 2002, was the modernization of the decarburization line in the Electrical Steels Segment. Within the framework of this investment a nitrogen generation and storage plant and hydrogen discharge and storage station were put into operation. The supplier of those faclities was AIR-LIQUIDE – the world renowned French company. The complete implementation of the investment allowed the Company to reach the world level in the electrical steels technology.

In 2003 Stalprodukt S.A. was recognized as the best IT-managed company in the metallurgical branch in Poland. Already at that time a vast network linking all the entities belonging to the Stalprodukt Capital Group and warehouses all around Poland testified to the scale of the company’s computerization. The new version of the IFS Applications integrated management system introduced in 2003 allowed for the use of new system functions, particularly in the areas of customers’ orders, production planning, and access to data via web-sites. The same version of the program was also launched in all the Capital Group companies. However, the year 2003 was not favorable for all the Group companies: two companies localized in Bochnia were forced to file petitions for bankruptcy.

What Poland’s accession to the European Union meant for Stalprodukt, was the increase of the comercial offer’s competitiveness, mainly attributable to the abolishing of trade and customs barriers. After 1 May 2004, thanks to the considerable simplification of formalities, the time of goods delivery to recipients in EU countries was significantly reduced. Thanks to this, the Company started to compete even more effectively in EU markets. Our country’s EU accession attracted foreign partners’ increasing interest in the cooperation with Polish enterprises, which well-prepared companies – like Stalprodukt – took advantage of. This was proved by the increased exports of highly processed products (transformer steels and toroidal cores), retaining the to-date contractors and acquisition of new ones.

The year 2004 brought some changes in the Company’s shareholding structure. They resulted from the privatization of the Polskie Huty Stali S.A, the Company’s majority shareholder. As of 5 March 2004, the Polish government signed an agreement to sell 60 percent of PHS S.A. shares. The transferee was the LNM Lakshmi Mittal’s concern, which soon established in this place the Ispat Polska Stal S.A. company, subsequently operating under the business name of Mittal Steel Poland S.A. It became the major Stalprodukt’s shareholder.

In 2005 the Stalprodukt Board and administrative services moved to a new seat in the area of the Bochnia plant. The capital group grew with the acquisition of another subsidiary company – STP Elbud – with 100-percent Staprodukt participation. As a result of a tender announced by the Voivode of Małopolska, Stalprodukt acquired the state-owned Elbud enterprise located in Krakow and after the restructuring developed steel structures production there, and introduced a completely new product range of noise barrier structures. The company also comprises a hot dip galvanizing plant. In the same year the Stalprodukt distribution network was expanded with another warehouse in Koszlin. On the second stage of network expansion, in the years 2002-2005, it was supplemented with sales outlets in a few Polish cities. Thanks to this, as much as 80 percent of sections produced in Poland are being sold through our own distribution network.

The Company made an enormous success in the improvement of the management process. In 2005 the Stalprodukt S.A Capital Group launched a new IT system – CRM (Customer Relationship Management) – to manage contacts with customers. The purpose behind the system is the analysis of data concerning the cooperation with customers, aimed at the adjustment of the company’s offer to market expectations, and also systematic and consistent data gathering on the market absorptive capacity, competition and current market conditions. The system enables access to the marketing data of all the Capital Group participants and distribution network. Its installation resulted from the policy of a “marketing-oriented company” accepted by Stalprodukt and a pioneer CRM installation in the the Stalprodukt Centrostal Krakow trade network in 2001.

The Company’s strategic targets announced in 2005 included the development of investments. Within three years the Company is going to earmark PLN 150 million to this end.

MOST SIGNIFICANT EVENTS IN COMPANY’S HISTORY:

1971 – construction of the Cold Formed Profiles Plant started in Bochnia and production of cold formed sections started at the Metallurical Plant/Kombinat of the Lenin Steel Works.

1972 – investment works connected with the construction of the Transformer Steels Plant were started at the Metallurgical Processing Plant.

1976 – transformer steels production was launched in the Metallurgical Processing Plant

1978 – dynamo steels production was started

1991 – the Metallurgical Processing Plant was tranformed into a joint stock company – ZPH Stalprodukt S.A.

1992 – ZPH Stalprodukt S.A. started its operations

1997 – the Company was first listed at the Warsaw Stock Exchange

1999 – a production plant was launched in Tarnów

2002 – the first stage of all-Poland distribution network construction was completed

2005 – the Company started to operate under the business name of Stalprodukt S.A.