Bosnia metal producers seek gov't aid to survive

* Q1 metal sector exports down over 50 percent * Government urged to subsidise electricity prices By Daria Sito-Sucic SARAJEVO, June 3 (Reuters) - Bosnia's metal producers, the country's main exporters, urged the government on Wednesday to help them survive the current economic crisis by subsidising electricity prices and launching long-delayed investments. "The metal sector has recorded a fall in exports of about 50 percent in the first quarter of 2009, and April was no exception," said Foreign Trade Chamber President Milan Lovric, adding that the fall impacted output and prices alike. ArcelorMittal Zenica steelmaker, a unit of global steel maker ArcelorMittal, and Bosnia's sole aluminium producer Aluminij Mostar have seen a drastic fall in production and exports this year and expect the trend to continue. The metal sector is key in the Balkan country, impoverished after the 1992-95 war, with exports accounting for about 80 percent of its total output. "Bosnia will need a long period of revitalisation to neutralise the negative effects of the turmoil on the world market," Lovric said. Metal producers have been affected by lower demand and global prices are down by half but they say the impact could be reduced if the government helped them with guaranteed power supplies and reduced taxes on imports of raw materials. Aluminij's management has long complained about a lack of government support in providing the smelter with regular power supplies at local prices given to other exporters. "Aluminij is paying to local power providers a price that is 30-100 percent higher than for other firms in the world," said Vladimir Bozic, Aluminij's technical director. He urged the government to grant it equal treatment. Bozic said Aluminij, which had exports of 370 million Bosnian marka ($268 million) in 2008, recorded exports of $36 million in the first quarter of 2009, two and a half times less than in the same period last year. Aluminij Mostar reported a record annual output of 123,000 tonnes of metal in 2008 and revenue of $460 million. GOVERNMENT URGED TO PROVIDE LOANS, INVESTMENT Bozic urged the government to press investment banks to give credits to export-oriented firms, such as Aluminij Mostar, enabling them to survive the crisis year. "Companies need to survive to keep output and employees this year. Next year is likely to be better," he said. Aluminij is operating at 75 percent of capacity but does not plan to fire workers, Bozic added. Seid Kapetanovic, a manager at ArcelorMittal Zenica steel maker, said that the government should launch long-delayed infrastructure projects, such as the construction of a highway and invest in energy projects and real estate. "Our main request to the government is to move with the investment cycle and provide international loans," he said. Output and sales as well as exports at ArcelorMittal Zenica in the first four months of 2009 were less than 50 percent of the same period last year. The steelmaker produced 580,000 tonnes of metal in 2008, with revenue of 670 million Bosnian marka and exports of 380 million marka.