Prime Minister Marcel Ciolacu paid a working visit to UCMH Reșita

On Friday, Prime Minister Marcel Ciolacu paid a working visit to Uzina de Construcții Maşini Hidroenergetice SRL (“UCMH”), accompanied by Hidroelectrica representatives: Karoly Borbely – CEO & Board President, Ianaș Rădoi – COO & Board Member and Răzvan-Silviu Avram – member of the Supervisory Board, as well as UCMH administrators, Manuela Feder, Aurel Bară and Sebastian Fârtat.

This move comes at a crucial moment for the Romanian energy industry and underlines both Hidroelectrica’s commitment, by taking over the UCM Resita (“UCMR”) business, and the Government’s commitment to support strategic industrial sectors and stimulate economic growth.

The evolution of the Romanian economy since the 2000s has put significant pressure on the heavy industry market. As a result, UCMR went through the most difficult period due to unfavorable market conditions and reduced revenues, which inevitably led to the company entering insolvency proceedings in 2011.

On March 11, 2024, the contract for the sale of the UCMR business to UCMH, a newly established company, whose sole partner is the state company Hidroelectrica, the largest electricity producer in the country, was signed.

The business transfer included the takeover of the ABC industrial production platform, the partial takeover of the Câlnicel production platform, the integration of the plant’s specialists in the field of design, technology and execution, the assimilation of project know-how together with documentation from UCMR’s own archive, rights of intellectual property, as well as the acquisition of assets/equipment with machine tools and machinery necessary for the execution of new, complex equipment or the repairs and refurbishment of equipment in operation.

UCM Reșita produced the related equipment for over 80% of the national hydropower system, putting into operation over 6,325 MW of installed power, which represents 326 hydropower groups.

By taking over the UCMR business, a consolidation and expansion of the Hidroelectrica Group’s capacity to carry out fast and efficient maintenance operations is achieved, given that the local know-how for such operations is increasingly limited. Thus, the transaction secures the availability, continuity and reintroduction into the economic cycle of a workforce specialized in ensuring the optimal functioning of the existing hydropower plants in the Hidroelectrica portfolio.

In the period 2024-2028, the budget estimated to be allocated by the Company for the Production of Electric Energy in Hidrocentrale Hidroelectrica S.A. for Uzina Constructoare de Masini Hidroenergetice S.R.L. will be approximately 1 billion lei. This budget will materialize in two directions:

• 500 million lei participation in direct investments in UCMH consisting of: investments in human resources; modernization of production capacity; modernization of manufacturing halls.

• 500 million lei modernization, re-technological and maintenance works at the production capacities of Hidroelectrica, works that will be executed in UCMH.

  “I don’t think there is a greater pride for a prime minister than to come to the oldest industrial unit, with a history of over 250 years. After insolvency, at this moment, we have stability and can talk about a future. I want to congratulate the members of the company’s management, and you, the CEO of Hidroelectrica, who made this decision (taking over UCMR). Hidroelectrica has majority Romanian capital and the Romanian capital, in fact, saves a factory, and gives a perspective.

Here (at UCMH) the hydro aggregates from the Iron Gates were made, and not only that. Now that I have seen that components are being brought in from the Iron Gates for repairs, I am convinced that there is hope for you, the 440 people who are still active at UCMH, considering how long you have waited for this prospect, “said the Prime Minister Marcel Ciolacu.

“Hidroelectrica, the most valuable company of this country invests in UCMH, it gives hope to the people and the activity we carry out. As you very well know, we are the largest company in the country, 30% of the energy is produced by us. Here at UCMH, the oldest industrial unit, founded in 1771, 1461 steam locomotives were manufactured, including marine engines, and last but not least, more than 300 hydro units. I would like to thank people for being patient during the 13 years of insolvency. Hidroelectrica means a new beginning” – said Hidroelectrica CEO, Karoly Borbely.

Investments in UCMH have the potential to generate multiple economic and social benefits. By improving production capacities and equipment quality, UCMH will become an important player on the international market, thus strengthening Romania’s image as an industrial hub.