Chemical producer Oltchim Ramnicu Valcea (OLT) decided to send part of its staff into technical redundancy starting June 22, to reduce costs. The company cannot afford buying raw materials, according to Romanian news agency NewsIn.
The company reps admitted having financial difficulties: their equipment is not used to its full capacity, and the company cannot pay salaries and suppliers. The statement was made into a report sent to Bucharest Stock Exchange.
Oltchim reduced the production by 40%, because the company could not afford buying basic raw materials, like ethylene and propene. Therefore, the company sent into technical redundancy part of staff to reduce costs, until further notice.
In the beginning of the month, the Executive adopted a memorandum through which requested the European commission's agreement to grant Oltchim state bonuses worth of 49 million euros in order to save it. About 2,000 Oltchim staff protested at the end of May, because the state guarantees never came.
Oltchim Ramnicu Valcea recorded losses worth of 28.1 million lei during the first 2009 trimester, almost eight times as much as the losses for the same 2008 period.