Kalistani Major History

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Trade Minister Schmidt to be dispatched to Wiel
Government seeks markets for Aluminum stocks and electronics investment
Kaliburg, Grand Duchy of Ananto
July 1, 5552


Trade Minister Christopher Schmidt discusses challenges of finding new markets in May

His Imperial Majesty's Minister for Trade and Industry, Christopher Schmidt will be dispatched to Wiel, Wrnuke on an official trade mission. During his visit to the Jelbic nation, he will travel with representatives of Kalistan's National Ferrominerals Company (KNF) and Kalistani Micro Divisions (KMD) to discuss trade and new investment in the wake of His Imperial Majesty's meeting with Archduke Bunjamin in April. Schmidt's goal is secure a regular buyer for Kalistan's excess aluminum stocks and create new investment opportunities in Majatra.

"Kalistan's aluminum production is greatly underutilized," said Minister Schmidt. "KalNaFerCo developed the industry hundreds of years ago to find a constant source of Bauxite to provide Kalistan with the necessary materials for our aircraft and auto industries, and we have since then had no problem meeting our own domestic demand cheaply and efficiently. But KNF reports year after year that Kalistan's aluminum production is operating at a mere 8% of capacity: We have to date attracted very few international purchasers, and therefore have not been producing nearly as much as we could. We could double our output year over year and it wouldn't come close to making the industry profitable, because there just isn't enough sales to meet costs. Consequently, the aluminum works, which we need to keep open for our own domestic demands, nearly puts KNF into the red every single year. Additional international sales would allow us to increase production and take advantage of scale production methods, greatly altering the balance sheet for KNF."

At the Royal wedding in April, the possibility of a potential trade deal with Wrnuke was raised, and now Minister Schmidt is following up on the overture with a trip to Wiel. "If Wrnuke decides that they would like to be a regular purchaser of aluminum from KNF, this would certainly be welcomed. I've been authorized to offer aluminum at half a point under spot if we are able to conclude a long term deal." Details of the deal still need to be hammered out, but Kalistan would most likely request trade credits with the Jelbic economic power that it can use to purchase goods and services that Kalistan needs each year. "There is no doubt that we could easily cover any order that Wrnuke would make: We have so much excess capacity in our production chain that even large runs would be easy." The aluminum would be created at the KNF National Foundry in Sulari.

In addition to the talks about Kalistani Aluminum, the mission was accompanied by representatives of KalMD, who are prepared to discuss a significant investment in microprocessors. "KMD had initially intended to build a plant in Gaduridos last decade, but that plan was scuttled by Gaduri intransigence, and KMD had to cut its losses," said Minister Schmidt. "Since then, they have been looking for opportunities to get involved with microprocessors elsewhere. It is known that Wrnuke has a microprocessor industry that they are looking to expand, and KMD has expressed interest in joining them in that endeavor." The Kalistani electronics giant is prepared to invest up to ₭350 Million in initial outlays into the microprocessor industry industry in Wrnuke to obtain a reliable and inexpensive source of microchips for Kalistani consumer electronics.

"Wrnuke has an advantage over Kalistan in this area," said Schmidt. "While we both have a microprocessor industry, they have a better source of raw materials and labor specialized in this area of production than Kalistan does. Consequently, it is far more cost effective for us to buy these items directly from Wrnuke than it would be for us to increase our own production locally. It makes sense from a producer and consumer standpoint, and a large investment will help us dramatically affect the trade deficit." Kalistani investment in the Wrnuke electronics sector will also help KMD cut prices on the things that are made with those microprocessors, things Kalistani consumers like and appreciate like smart phones and lap top computers. "Shifting production of microprocessors for consumer application to Wiel will also allow KMD to shift its local production to more specialized architecture, including defense and aerospace applications. This makes sense on all sides."

The trade mission is expected to leave by the end of this month and will be in Majatra for several weeks. During this time, questions of logistics and price negotiations will also be worked out. The KalSiE greeted the news, as KNF and KMD stocks rose more than 6 points in overnight trading.