ARCHIVES HISTORIQUES 
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COM (85) 483 
 
 
 
Vol. 1985/0184 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the openi ng to the public of the historical archives of the European Econom ic 
Community and the European Atomic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this f ile is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 198 3 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 vom 27 .9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION  
OF THE
EUROPEAN COMMUNITIES
General SecretariatC0MC85) 483 f i n a l  
Brussels, 23 Septem ber 1985
FOR OFFICIAL USE ONLY
COMMUNICATION BY THE COMMISSION TO THE COUNCIL
Request f o r  C o u n c il a s s e n t under A r t i c l e  5 4 , second p a ra g ra p h , o f th e  
ECSC T r e a ty  t o  th e  fin a n c in g  o f a p ro g ra m m e 'fo r r e s t r u c t u r in g  and  
m o d e rn izin g  th e  w ire -d ra w in g  p la n t and f a c i l i t i e s  f o r  th e  
m an u factu re o f p ro d u c ts  fro m  drawn w ir e  ( n a i l s ,  f u l l y -  
g a lv a n iz e d  w ire  e t c . )  at th e  M a rn a v a l, Commercy and  
P é rig u e u x works o f th e  f ir m  o f TREFILUNIO N, P a ris
C0M (85) 483 f i n a l

FO R  OFF I  C T  A T , UFR O N I,Y
Note to the Council
:  Request for Council assent under Article 54, second paragraph,  
of the ECSC Treaty to the financing of a programme 'for  
restructuring and modernizing 'the wire-drawing plant and  
facilities for the manufacture of products from drawn wire  
(nails, fully-galvanized wire etc.) at the Marnaval, Commercy  
and Périgueux works of the firm of TREFILUNION, Paris
Loan requested :  FF 70 million (approximately 10,2 million ECU) (*)
Borrower :  TREFILUNION, Paris
TREFTLUNTON, a wholly-owned subsidiary of SACILOR, the Community's  
leading wire rod producer (**), operates in two sectors :
the manufacture of mild-steel drawn wire and derived products  
(galvanized wire, plastic-coated wire, wire netting and fencing*  
special-purpose nails etc.) with an output of the order of 140 000.,  
t/year, i.e. 20 % of the mild-steel drawn wire''produced in France.  
This division accounts for two-thirds of TREFILUNION's turnover;
- and the manufacture of welded steel mesh for the construction,  
industry, with an output of the order of 110 000 t/year, i.e.  
roughly 40 % of the welded mesh produced in France. This division  
accounts for one third of TREFILUNION's turnover. «
(*) 1 ECU = 6,84080 FF at 7 June 1985
(**) The SACILOR group supplies 13.7 % of the Community's output of wire  
rod, a position strengthened early in 1985 by the creation of  
UNIMETAL, which groups together the long-product operations, in  
particular wire-rod making, of SACILOR and TJSIN0R. SACILOR has a  
majority holding in this group.

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These two sectors of activity use large amounts of steel: the cost of
the wire rod used accounts for between 60 and 75 % of the selling price  
of the products, according to type. 97 % of this wire rod comes from  
the Community.
The welded steel mesh branch, which has relatively low value added, aims  
only to maintain its activities at the current level following a  
programme of modernization and rationalization as follows.
- a FF 48 million investment programme carried out between 1983 and
1985, reducing the workforce from 470 to 255 and increasing  
productivity per worker from 280 t/year to 450 t/year; -  !·
- a reduction in capacity from 170 000 to 110 000 t/year;
- a decrease from 7 production centres to 4;
- a reduction in the number of standard types of product manufactured
and the development of products which better suit demand.
This division is currently climbing back.to a satisfactory level of  
profitability and should show considerable profit, net of all expenses,  
from 1986 onwards. No major investment sTiould be required in the near
future.
The drawn wire and derived products branch has embarked upon a major 
restructuring and modernization programme designed to improve its 
competitiveness considerably through the investments which are the 
subject of this loan application. '
TREFILUNION operates six works:
- Marnaval 
Commercv
- Vauvert
- Perigueux
- Creil
- and be Pouzin.
This last works will b? closed down in the course of the first half of  
1985.
The workforce Currently Xands at 13°°’  ^ciuding ^ I n  
and derived predicts division,  as against 1890 (*) including 1420 (*) in
the drawn wire division in 1.\ ('000 tonnes/year)
\  \  ,982 1983 .1984\ 1982
Drawn wire and derived products 136 142 131
Welded steel mesh 264 221
Total
The drop in output in 1984 was due to the company's discontinuing  
cerrain unprofitable activities in the drawn wire sector «nd  
, barkening demand for welded steel mesh rrom the depressed building
industry.
T * '  th o u g h
SACILOR which closed down in 1984.

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Description of the programme j1
TREFILUNION's present loan application relates to investments entirely 
in the drawn wire and derived products sector, basically to replace 
obsolete equipment. The aim is to :
increase output per worker from 110 t/vear in 1983 to 108 t/year in  
1987;
- cut processing costs bv 18 % (*) per tonne produced, mainlv by 
reducing wage costs (- 20 7) through a reduction in manpower .  - 
(- 37 %) and rationalizing production as follows:
- in the workshops: closure of certain workshops: ceasing
production of patent wire and concentrating the Marnaval  
galvanization, plastic coating and wire netting operations at  
Commercy;
- on the production lines: reducing the number of installations
by standardizing products; _  -
- increase value added by an estimated 13 % (*) increase in the  
processing margin per tonne produced, brought about by  
concentrating on quality products and cutting back on  
run-of-the-mill products;
- the reorientation of production towards products for which,
demand is increasing (fine wire, cold heading wire, coated wire etc.),
- the concentration of production on the most effective equipment, the  
production potential for wire drawing being reduced from 25O.OOO t/yr  
in 1933 to 160.000 t/yr in 1936.
The programme covers :  .  .  ·
a) at the Marnaval works
- modernization of the pickling plant
- two drawing machines and modernization of existing machines
- one controlled environment annealing furnace
- one phosphatization line
- modernization of the control equipment
- modernization of the nail-making shops.

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li) at the Cornnercy works \
- 17 drawing machines, primary treatment and production of/”' 1.5  
mm wire for supermarket trolleys, containers, castings of all
kinds;
—If drawing machines for fine wire 1.5 mm for wire netting,  
ties, florists' wire, champagne cork wire etc.) and  
modernization of existing machinery;
one high-speed zinc-coating line.
' 1
c) at the Pcrigueux works
- modernization ol the .nail-making works.
Upon completion of the programme, the total number of machines will  
be reduced :
- primary treatment: from 80 to 45
- finished wire drawing: from 56 to 26
- nail-making: from 170 to 91.
Investment costs
a) FF 43.7 million
b) FF 92.0 million
c) FF 5.9 million
Timetable for the work  
End 1983 to mid-1987.
Although the decline in industrial activity has not hit wire production  
as hard as it has the iron and steel industry, if only because of the*  
extreme diversity of the sectors which use these products, for the last  
decade or so the industry has experienced similar problems :
- a slowing down of the increase in consumption at world level and  
stagnation or even decline in Community consumption;
- increased penetration of the Community market by imports from 
non-member countries;
- over-capacity and over-manning in most of the Community companies;
- lower prices and processing margins leading to a drop In Investment
and obsolescence of equipment.
TRFFTLUNION is endeavouring to adapt to these changes by concentrating  
on the higher-quality products and abandoning the less profitable ones*  
while modernizing and rationalizing its operations.

During the last few years, the companv has maintained output of drawn  
products at around 135 000 t/vear, a quarter of which is exported.  
Subject to the necessary alterations, and if demand follows expected  
trends, this present production rate should be maintained during the  
next few years, or even increase slightlv with improved competitiveness.
Community output of drawn products* is running at between 5 and 6 million  
t/year, which involves wire rod consumption of the order of 6 million  
t/year, i.e. over half the Community production of wire rod. While.a  
small proportion of drawn products are undoubtedly obtained from  
imported steel, the fact remains that wire drawing is one of the main  
outlets for the Community's steel industry.
TREFILUNION's consumption of steel is around 250 000 t/year,  
approximately 140 000 t/year of which is for the drawn products branch  
and the rest for welded mesh. 97 % of-requirements are supplied bv the  
Community steel industry, approximately 25 % coming from German. Italian  
and Belgian suppliers.
Against this background, in view of the"size of the programme, the  
reduction in costs it will bring about and its effect on maintaining  
or even increasing steel consumption, the TKEFILUNION restructuring  
investments would seem to facilitate the sale of ECSC products and  
consequently to justify financial aid from the Community in the form  
of a loan under Article 54, second paragraph, of the ECSC Treaty.
For these reasons, the Commission has decided in principle to grant t  
loan requested by the company under the second paragraph of the  
abovementioned Article of the ECSC Treaty and requests the assent of  
Council to the granting of a loan of FF 70 million (approximately ,  
million ECU) to TREFILUNION.