26 March 2004

Sructural changes at KCM S.A., Plovdiv

At the Meeting of the Board of Directors of KCM 2000 SA held on 27th February, 2004 a resolution was made to develop the company as an industrial managing group which will carry out its production, financial and investment activities not only in the field of metallurgy but in other economic fields, as well. This measure aims at decreasing the economic risk at KCM SA and the companies which are included in the group. This resolution gives a new direction to the future development of the company and requires the respective strategic approaches and managing decisions.

The experience so far proved that reliance on one market only - that of lead and zinc - can lead to negative consequences. The dramatic development of the international nonferrous metals market in the recent years calls for adequate actions by the producer companies and initiating a series of changes to reduce the future economic risk. The possibility for KCM SA to keep effective production activity and repay its credit liabilities can be achieved only by diversification of that risk.

The strategic task of KCM 2000 SA is to develop a stable industrial trading structure which is to reduce the economic risk at KCM SA, engage in new activities, create work places and enhance a profitable development. Financial credit policy, capital structure management and corporative development projects will be concentrated in the management of KCM 2000 SA. The operative managing body of KCM 2000 SA will consist of 8 officials which are from the present team of KCM, and namely: Vasil Nachkov, As.Prof., Dr., Eng. Nikola Dobrev, Eng. Rumen Tsonev, Rozin Angelov, Stefan Bakalov.

The administrative separation process between KCM 2000 SA and KCM SA will start in the beginning of April. From the structural point of view the managing body of KCM SA will be the same:

• Supervisory Board - Chairman Vasil Nachkov;
• Managing Board - Chairman As.Prof.,Dr.,Eng. Nikola Dobrev;

The following changes in the operative management of KCM SA are planned:

• Executive Director - Eng. Nikolay Konarev;
• Financial Director - Siyka Hriskova;
• Director of Purchases and Sales Management - Stoyan Pehlivanov;

The trading activity of the group will be performed by KCM TRADE which is subsidiary of KCM 2000 SA. It will cover the full cycle of market research and trading. An important moment in the activity of KCM TRADE will be the provision of new financing schemes for the commercial and exchange operations.

These changes aim at creating an efficient structure which will increase the competitive powers of the group and make its activity more profitable.

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