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CIECH Soda Romania forced to suspend its production in the long run and implement the voluntary redundancy programme

The six-months’ negotiations on the resumption of the supply of process steam of an acceptable price to the Romanian soda factory of the CIECH Group have been ineffective so far. Accordingly, CIECH Soda Romania, which can no longer bear the cost of maintaining the entire staff of the plant due to its suspended production, was forced to make a decision on the implementation of the Voluntary Redundancy Programme and group layoffs. At the same time, the CIECH Group is still analysing the possibility of developing an effective steam source in the next few years to enable the Romanian factory to resume soda production in the long term.

As a result of the finalisation of the Voluntary Redundancy Programme, on 1 April this year, i.e. over 70% of the entire staff will be leaving the company. The company will continue to employ over 70 people – they will be responsible for the production of sodium silicates as well as maintenance of the soda ash production plant. The remaining employees will be covered by group layoffs.

The CIECH Group is still analysing the possibility of developing an effective steam source in the next few years to enable the Romanian factory to resume soda production in the long run. The CIECH Group is still analysing the possibility of building an effective steam source that could arise in the next few years and would allow the CSR to restore soda production in the long term. However, possible scenarios of such action exclude the ability to incur any investment expenses that could affect the balance sheet of the CIECH Group. As part of this project, CIECH's intention is to establish cooperation with an external partner responsible for the construction and maintenance of a new steam source, as well as authorities, in order to obtain government assistance and launch support mechanisms provided by the European Union.

CIECH Soda Romania temporarily stopped its production and went into stand-by mode on 18 September 2019. This decision was due to the termination of the contract for the supply of process steam, necessary in the production of soda, by the CET Govora CHP plant, i.e. the only available supplier of this raw material. The new steam prices proposed by the supplier during many months of negotiations prevented the Company from carrying out any profitable operations. 

In recent months, the Company has conducted an intensive dialogue with local partners, as well as representatives of the Romanian government. The unstable political situation in Romania, with its Council of Ministers being changed several times during this period, prevented the parties from attaining advancement in their talks. The coronavirus pandemic in recent weeks has also contributed to the absence of progress in the negotiations, changing the current and future economic situation of Romania in a significant manner.

Contact

Mirosław Kuk, Head of PR

miroslaw.kuk@ciechgroup.com, tel. +48 723 66 86 86.

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