Romania’s Alro Aluminum Smelter Cuts 1,200 Jobs

Romania’s Alro, the largest aluminum producer in Central and Eastern Europe, owned by Dutch-based Vimetco, announced Friday it is evaluating a 50% cut in production and sacking 1,200 of its operational staff in Slatina, in 2009.

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Romania’s Alro Lays Off 1,800 Employees - Union Leader

Alro’s trade union leader Constantin Popescu said earlier Friday that more than 1,800 of the total 3,500 employees of the company will be laid off.

The company’s restructuring plan comes after a sharp decrease in aluminum price, which has dropped by more than 50% since mid July 2008, Alro said.

Final decisions will be taken at next board meeting of Alro SA, which is due to take place at the beginning of next week, an Alro press release said.

Dutch-based Vimetco, Alro’s majority shareholder, has recommended at this week’s board meeting further cuts in aluminum production at Alro SA, as well as a further cut in headcount in Romania as part of an overall analysis of Vimetco’s global operations.

The production cuts which were discussed could go up to 50% of Alro’s capacity. Alro's annual primary aluminum production stood at 283,000 tons in 2007.

In November, Vimetco, the majority owner of Alro, said it will cut output at its Romanian operations by up to 65,000 metric tons in 2009, and also plans “substantial cut back in head count in Romania”, along with other cost cutting measures.

Alro’s headcount will most likely be reduced by an additional 1,200 employees in 2009, the company said Friday.

Alro will be actively looking to reduce costs also for other raw materials and input factors such as alumina, coke, pitch, and other materials and services.

“The current aluminum price level has forced us to evaluate further cuts in Romania in order to maintain our competitive edge and to preserve the cash levels of the group and the local entities,” Alro’s President Christian Wust said.

Vimetco owns 84.19% of Alro's shares, while Romania’s investment fund Fondul Proprietatea owns a 9.93% stake in the company.

Alro reported a 22% lower net profit in the first nine months of the year to 292.8 million lei ($103.8 million), from RON376.2 million in the similar period a year earlier.

Alro posted RON1.74 billion in revenue in January-September, up 2% from RON1.7 billion in the corresponding period a year before.

On the Bucharest Stock Exchange Friday, Alro shares were trading, at around 1358 GMT, at RON1.45, down 13.17% on the day.

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