Romanian aluminium producer Alro [BSE: ALR] said that it will cut the production of primary aluminum and is considering technical unemployment in 2022 due to the rise in energy prices.
The production activity of primary aluminum will be reduced from five electrolysis halls to two halls, Alro said in a statement filed with the Bucharest Stock Exchange, BVB, on Monday.
The company will resume its entire production activity when energy market conditions return to normal.
The production programme for 2022 is based on preserving liquidity, ensuring timely payment of salaries, taxes and fees, debts and reduce its dependence on electricity, it said. Alro also intends to maintain or even increase the portfolio of processed products and reduce the portfolio of primary products, in order to achieve a balanced and efficient production mix.
The company's management also said that it is not considering lay-offs, only measures for the efficient use of labour, including periods of technical unemployment.
In 2022, the company will implemented measures to reduce costs and streamline the activity, and the quantities of primary metal that will no longer be produced will be partially offset by recycled metal or primary metal purchased from third parties.
The company also said it will focus only on those investments that will bring immediate gains and improvements to its business or that are necessary in order to comply with the safe and legal operation. The other investments will be postponed to a later date, depending on economic developments.
A subsidiary of Vimetco N.V., Alro is one of the largest vertically integrated aluminium producers in Europe, having an installed production capacity of 265,000 tonnes per annum of electrolytic aluminium, 35,000 tonnes per annum of recycled aluminium and 335,000 tonnes per annum primary cast aluminium.
The Alro Group comprises aluminium manufacturer Alro, aluminium extrusion business line Vimetco Extrusion, alumina producer Alum, bauxite mining company Sierra Mineral Holdings, holding and management company Conef, holding company Global Aluminium Ltd. and marketing services provider Bauxite Marketing Ltd.
The group's structure ensures an integrated production chain assuring the raw materials for the flagship company Alro.
Alro's shares were changing hands 4.76% lower at 1.8 lei by 1249CET on Tuesday on the BVB.
On Friday, Alro announced that it has completed the acquisition of Vimetco Trading from its majority shareholder Vimetco PLC and its subsidiary, Vimetco Management Romania, becoming its sole owner.
(SeeNews, December 28, 2021)
