Georgia's ferro-alloys plant, owned by Austria's DCM, boosted its 2004 output to 120,000 tonnes aims to hit 150,000 tonnes in 2005, an official said on Wednesday. General Director Nika Chikovani told Reuters output at the plant, in the western town of Zestafoni, rose after DCM bought a 51-percent stake for $7.1 million in July 2003. "We have boosted output to 120,000 tonnes of ferro-alloys this year from 36,000 tonnes in 2003 and will raise it to at least 150,000 tonnes next year," Chikovani said in an interview.

In communist times, Zestafoni produced 500,000 tonnes of ferro-alloys a year, but output tumbled to a little more than 40,000 tonnes by 2002.

Georgia has struggled to adapt to capitalism. Many of its factories work well below full capacity and power cuts are rife.

Chikovani said DCM had invested $15 million to refurbish two out of 22 furnaces, build two new furnaces, buy new equipment and solve the electricity supply problem.

He added the average wage increased by 45 percent to 242 lari ($134) since August last year when the purchase deal had been finalised. The plant employs 2,700 workers, the same number as in the Soviet times.

Zestafoni makes silico-manganese and medium-carbon manganese alloy - components used to harden, strengthen and give corrosion resistance to steel.

It exports to the United States, Canada, Australia, China as well as Western Europe, where DCM has interests.

DCM has also expressed interest in privatisation of the neighbouring Chiatura manganese plant, Zestafoni's main ore supplier.

DCM had offered $100 million for a lot which includes Chiatura manganese plant, a hydroelectric power station and a coal plant. It paid $10 million as a deposit.

The other two bidders are Interpipe, run by Ukrainian President Leonid Kuchma's son-in-law Viktor Pinchuk, and Kazakhstan's Eurasian Industrial Association, led by one of the oil-rich country's tycoons Alexander Mashkevich. A new owner will be announced on Jan. 11.

Copyright Reuters, 2005