State aid, Alro Slatina's solution to weather crisis

The boardroom of the company handled talks last week with the county authorities, representatives of the seven trade unions, and members of the Parliament from Olt County, in order to draw measures to avoid the 50% cut in production and layoff, NewsIn informs.

At the end of the two-hour meeting, managing director of Alro Slatina, Gheorghe Dobra said the attendants had called for a commission to study the current situation of the company and to move forward with all proceedings to call upon state aid.

Dobra did not disclose the amount needed for capital injection. “It remains to be seen, the extent of the support we will seek after a new review of damage and whether the production cut and layoffs will still be applied. It is early to estimate the exact amount”, said the managing director of SC Alro SA Slatina.

Gheorghe Dobra added that the commission would soon be formed, in order to start procedures as soon as possible.

Moreover, the effects of the crisis over the aluminum smelter were anticipated since June, when the internal reorganization program started, whereas, the bearish evolution of aluminum was extremely sharp. Dobra denied all rumors the company plans to outsource production in China, affirming that his interest is to keep business on the floating line.

“Last year, we’ve cut costs by over 13 million dollars at 900 million dollars turnover. We moved fast on costs cut, but the market moved even faster”, Alro manager added.

Gheorghe Dobra said some of the clients of the company had requested the termination of contracts, and it was decided that all misunderstandings regarding their breach of the terms would be amicably resolved in order to avoid a full disconnection with business partners.

According to a prior announcement, on December 19, 2008, Alro Slatina would cut production output by 50% and as of next year, the workforce would shrink by 1,200.

Due to the bearish quotation of aluminum, which fell by roughly 50% since mid July 2008, Vitmeco recommended in this week’s meeting new production output reductions at Alro SA and layoffs. This recommendation comes as a result of a general review of Vimetco’s global operations.

According to own statements, the company registered 292.8 million lei after-tax earning in first nine months this year, 22% down from a year ago, due to 5% decrease of turnover.
Alro Slatina reported 376.2 million lei after-tax earning for first three quarters, 2007.

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