SOFIA (Bulgaria), November 14 (SeeNews) – Bulgarian steel mill Stomana Industry, part of Greek metallurgical group Viohalco, will cut output by around a third and lay off staff in view of decline in exports caused by the global financial turmoil, local Dnevnik daily reported on Friday.
The company will make redundant some 300 staff and will streamline costs and operations, Dnevnik quoted Viohalco's representative to Bulgaria, Anton Petrov, as saying.
“The crisis has reached us faster than we expected. At present, we can say we are working to fill in the warehouses,” said Petrov.
Viohalco has halted all of its investment plans in Bulgaria for the time being, he added. He could not give a timeframe for the resumption of investments.
Other companies in Bulgaria’s metal sector are also suffering from lower global prices for their products and some have started cutting jobs. The country’s largest chemical fertilizer plant Agropolichim will also temporarily halt operations in view of the crisis, while another fertilizer plant, Neochim, which shut down its capacities for annual maintenance in August, said it will resume production later than initially planned.
Although the cabinet in Sofia says that the global crisis would only have an indirect effect on the country, which has no direct exposure to toxic U.S. securities, the global financial turmoil seems to have hit the Bulgaria’s emerging economy much harder than expected as metals and chemicals are the key export items for the European Union newcomer, which depends on foreign cash inflow to balance out its huge current account deficit, analysts say.
Earlier this year Stomana industry launched a 156-million lev ($99.5 million/79.4 million euro) line for long products with installed capacity of 800,000 tonnes, saying it has increased its rolled iron capacity to one million tonnes per year.
(1 euro = 1.95583 Bulgarian levs)
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