Italians suspended production in the steelworks ABS Sisak until June next year
According to confirmed information, the Italian Danieli Group has decided to indefinitely close its plants for the production of steel in Sisak, hopefully not longer than June 2016. They explained that the closure of the Sisak steelworks is caused by extremely unfavorable market conditions - low cost competitive products from Ukraine and China, and a reduced volume of orders
An official statement from the steelworks ABS Sisak
The official press release was made by the CEO, Marco Clemente: "Due to a difficult period in the market which currently all European steelmakers are facing, ABS Sisak decided to temporarily suspend the production, starting from December 1 to the next quarterly period, and it is all because the lack of orders. The plan is to re-launch activities as soon as market conditions allow it. In order to manage this temporary situation, during this transition period, in line with forecasts to restart the plant, the company has decided to send management to our headquarters in Udine with the task to develop projects for the future. The company wants to continue developing the plant and production, and therefore aims to develop strong partnerships for the future, despite this critical period.
At this point ABS Sisak has no intention to sell the plants, and all its decisions are focused on managing the transition period as well as possible. Further evidence that the Danieli Group believes in ABS Sisak is that shareholders significantly increased the share capital of the ABS Sisak, few days ago. At the same time, the company is aware that some of its decisions can not have completely positive consequences for the future, but it is continuously working to get ready for reproduction of special steel, when the favourable conditions occur."
Uncertain future of Sisak steelworks
Pessimistic rumors which predicted this turn of events few months ago, came true. Ukraine, because of its disputes with Russia, has directed most of its steel products on the European market, significantly reducing prices. Danieli Group was, like most European companies, forced to rationalize its production costs, which among other things led to the temporary interruption of production in Croatia.
The first to feel the consequences were the workers with temporary contracts, whose contracts weren't renewed. From the 1st of December to the middle of the month it is expected for the contracts with 90% of workers employed for an indefinite period to be terminated. Threfore, in just over a month, two hundred people will become unemployed.
Italians believe that this is a serious problem for them because most of the workers are most likely to find a new job until the start of production. They expressed regret that in Croatia there is no mechanism similar to the one in Italy, where in the case of short production break most of salary costs is taken over by the governement, and in order to preserve jobs. Thus they are forced to fire workers.
"ABS, as a responsible owner, is trying to reduce the damage by cutting costs. The situation is not good, but we're not going to sell the facility. We have also decided to withdraw the management to Italy in order to become able to return to Sisak. We want to preserve the backbone of the company , so that we don't lose them in the labor market." said an unnamed Italian source.