The company said it has not been able to agree on the start of industrial activity with the Liepāja City Council and the Special Economic Zone (SEZ) administration.
Meanwhile the municipal authorities in Liepāja will keep to their plan to create an eco-friendly industrial park on the sprawling territory of the former "Liepājas metalurgs" plant, which was once the city's major employer but which closed its doors after running into insolvency in 2013.
The lawyers of SIA "Liepāja Steel" are currently preparing the necessary documentation for the dismantling and shipping of the steel melting furnace. The board of the company does not yet have a date when it will be leaving Liepāja, but said it is keen to cut running costs by doing so at the earliest opportunity.
"The losses are big, yes. And there will be even more losses. We will now pay for the dismantling. We will dismantle the factory in Liepāja, and take it to Turkey. We will pay for transportation, plus a new factory must be built there," said company manager Mehmet Garip.
In the spring of 2021 the company "Liepaja Steel" – established in Latvia by the Turkish company "Aslanji Metalurji" – participated in the auction of the steelworks' most valuable asset – its giant furnace . The amount of the purchase was not disclosed at the time.
"We won the tender for about 10 million euros. Approximately. We are paying all of it now. We were not told anywhere that you cannot open this factory in Liepāja. I can't understand why Liepāja doesn't want it, we can't understand it," said Garip, the chairman of the board.
The entire territory of the approximately 120-hectare steelworks site belongs to the Liepāja SEZ and the municipality, which five years ago signed a memorandum of intent with the Ministry of Economy (ME) and the Latvian Investment and Development Agency (LIAA) on the development of a modern industrial park.
A short-term lease agreement was concluded with "Liepāja Steel", which ended in April this year. The company insists it wanted to conclude a long-term lease, but the Liepāja SEZ demanded a detailed business and investment plan, plus guarantees that metallurgy would not adversely affect the surrounding environment. The company did not submit any plan.
"The building is the property of the Liepāja SEZ administration. At the moment, there is a steel melting furnace and other equipment in the building. It must be vacated first, then we will see what to do with this building. In any case, entrepreneurs are interested in the area as such," said SEZ manager and Liepāja City Council member Uldis Hmielevskis (Liepāja party).
As previously reported, Liepāja Steel previously expressed its readiness to invest 200 million euros and create at least 450 jobs over five years – though again the lack of a business plan renders such prophecies less than reliable.
"The investor has not started operations, therefore the impact on the national economy can only be potential, and specifically on Liepāja," said representatives of the Ministry of Economy in a written statement to TV Kurzeme.
It is far from the first time that the arrival of investors and initial high hopes of a return to steel production and hundreds of jobs have failed to pan out.
The Liepājas Metalurgs plant in Latvia's third-largest city was first declared insolvent in 2013 after it failed to repay a state-guaranteed loan to an Italian bank.
After sinking 67 million euros into it, the government sold the plant to Ukrainian scrap metal dealers KVV Group in late 2014. It was renamed KVV Liepajas Metalurgs and officially re-opened on March 6, 2015, but soon started having problems again and was once more declared insolvent in September 2016 before that chapter ended in the courts.
Last year Latvian Television reported on the Turkish investment plan and a certain amount of caution regarding it from local officials.