Ispat International, the steel group which in 1996 acquired the Irish Steel plant at Cork, had invested some £15 million (€19 million) in the operation by the end of last year. The firm's latest annual report says it will invest a further £5 million by May 2002.

Ispat said sales from the Cork plant last year declined from $102 million (€110 million) in 1998 to $73 million last year. In 1997, Ispat recorded sales of $93 million from its Irish operation.

Sales from the Irish operation to the European export market in 1999 were worth $63 million, with the balance generated in the domestic market, Ispat said.

The company did not reveal a profit figure for its Irish operation, which it acquired from the Government in May 1996 for £1.

At the Cork plant, Ispat is bound by EU restrictions on production, investment and intra-EU sales, which do not lapse until next year.

No explanation for the drop in turnover at Cork was given in the annual report and no company spokesman was available in either Cork or London yesterday to comment on the figures.

Overall, the group reported a pre-tax profit of $128 million for 1999, 56 per cent less than in 1998 when Ispat reported a pre-tax profit of $288 million.

Ispat attributed the decline in profitability to a "severe downturn" in the global steel market due to the economic crises in Asia and Russia in 1998 and last year. Turnover increased by 34 per cent from $3.49 billion to $4.68 billion in the same period.

Figures in the annual report reveal that group steel shipments increased by 43 per cent to 15.4 million tonnes last year from 10.8 million tonnes in 1998. In Ireland, Ispat had a production capacity of 400,000 tonnes last year, the group said.

Most of the rise in shipments was due to the consolidation of its $1.4 billion acquisition of Ispat Inland in the US in July 1998 and contributions from its $107 million acquisition of Ispat Unimetal in France last July.