130 employees will take temporary layoff

Petrochemical division of Rompetrol will cut production of polymers in December 2008 – January 2009 and approximately 130 employees, namely 24% of its employees will take temporary layoff, as a result of the international crisis impacts, both national and international.

“It is a temporary measure that arises in the context of the market shrinkage, the focus being to re-balance production in terms with polymers demand, but also to avert the stockpiling polymers. Therefore, we decided to cut the polymer production by shutting down LDPE (low density polyethylene)plants in December 10, 2008 – January 31, 2009 interval and HDPE (high-density polyethylene) plants in December 1, 2008 – January 31 2009 interval”, said Dumitru Niculi, managing director of Rompetrol Petrochemicals.

Rompetrol is the fourth biggest companies in Romania in terms of earnings from sales registered in 2007.

The measure will affect employees in production and maintenance sectors, approximately 24% of them following to take a temporary layoff in December-January, under the provisions of the employment contract.

Although in January-September 2008 interval the company has raised its sales of end products by 40% (182, 000 tons) and by 61% its turnover (over 300 million US dollars), the operating profit was directly influenced by the hard market conditions and by the high costs of raw materials (propylene and ethylene).

Worldwide, the benchmark prices for petrochemical products registered a major downdraft in August-November 2008, of over 41% for polypropylene, 26% for LDPE and 40% for HDPE, together with a decline in demand.

According to the company representatives, in this period, the company will secure the low and high density polyethylene supplies from stocks and will maintain the polypropylene plant in function, Rompetrol Petrochemicals being the only polypropylene producer in Romania.

In order to keep the company’s relations with clients, banks and partners in positive conditions, the employees in the Commercial, Financial and Quality Control divisions will carry on the activity within the regular parameters, and a part of the production staff will ensure the safety and conservation of the plants.

Moreover, Rompetrol Petrochemicals will carry on its investment plans, the main objective being the reengagement of the installation which will ensure the raw material for LDPE and HDPE installations.
The investment plan of the company for 2008 is estimated at 9.5 million US dollars, while in 2003-2007 the investments totaled 67 million US dollars.

According to the company, the low and high density installations have a nominal capacity of 60,000 tons and are in the conservation mode since 1996 as a result of raw material shortages. For the modernization and building a liquefied gas sea terminal, the company allocated over 30 million US dollars in 2006 (LDPE) and over 14.5 million dollars in 2007 (HDPE).

Currently, the company has 531 employees, and in first nine months this year it reported a turnover of 300 million US dollars, up 61% from a year ago.

Translated by Camelia Oancea