Hungary bails out steelmaker Dunaferr

Hungarian Prime Minister Viktor Orban met with a working group aiming to save the indebted steel company Dunaferr on Wednesday, 1 February. 

Dunaferr manufactures steel products for the engineering, automotive, and manufacturing sectors in Dunaujvaros, central Hungary, employing around 4,000.

After Wednesday’s meeting with the working group, which includes local ruling Fidesz party MP Lajos Meszaros, Orban said cash-strapped Hungary will cover Dunaferr workers’ wages for the next six months. 

Hungary’s eurosceptic premier claimed that “Dunaferr was ruined by its former owners, its managers and finally by the sanctions imposed by Brussels. Unfortunately, it is in vain to expect help from Brussels, only sanctions come from there, nothing else.

“At today’s meeting we decided that the government will pay the wages of Dunaferr’s employees over the next six months, more than HUF 16 billion (EUR 41 million), and in the coming months we will work to ensure that within six months the ironworks will have a reliable, stable owner,” Orban added.

Steelmaker loss making for years

Dunaferr issued a plea for government support in September 2022, citing low steel prices, rising energy prices, supply chain issues and the war in Ukraine. 

The following month Orban’s Chief of Staff Gergely Gulyas had said the government was examining the company’s ownership structure, only for Dunaferr to be placed under liquidation by the the Budapest Municipal Court in December 2022.

Orban’s claims that Russia’s full-scale invasion of Ukraine on February 24, 2022 is to blame for the travails of the steelmaker are brought into question even by a cursory look at its business performance in recent years, however.

In 2019, Dunaferr posted a loss of HUF 54.1bn (EUR 140.39mn) on revenues of HUF 288.8bn (EUR 747.94mn) when, according to Gulyas, the company had close to HUF 500bn (EUR 1.3bn) worth of debt.

Dunaferr is 99.6% owned by Cyprus-based Steelhold Limited, one of whose stakeholders is reportedly Russian development bank VEB.