Reuters quoted Bosnia's aluminium producers and processors assaying that many of them will not be able to survive unless thegovernment helps them get access to more and cheaper funds soon.
Mr Predrag Covic GM of the Kapis cable plant and head of thealuminium industry association, which groups 12 Bosniancompanies said that the water has risen to our neck and some ofus will drown if the government fails to help us.
The base metal sector is key in the small Balkan country,impoverished after the 1992 1995 war, but the global economicdownturn last year has triggered 25% fall in output and halved its exports.
The metal sector accounts for about half of the country'soverall exports. Mr Covic said that the aluminium sector's revenues had declined substantially as prices of final products on western markets had fallen, while raw material prices hadrisen at the same time. The sector directly and indirectly employs 5,000 workers.
He said that "We still have steady demand but we lack trading capital. The situation on world markets ischanging and our suppliers and buyers do not accept deferred payment any more."
Mr Covic called on the government to either set up a development fund to provide trade financing orintroduce mechanisms that would kick start bank lending. Bosnia's commercial banks, which are 80%foreign owned, have kept a lid on lending since last year, when the value of commercial loans fell by threepercent or USD 282.5 million.
He said that the situation is very serious, if we do not get loans at more favorable terms, we will be forcedto further cut production and number of our employees and the state will suffer as well.
(Sourced from Reuters)
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