Ukraine’s Ilyich takes measures to overcome crisis period

Monday, 24 November 2008 14:02:24 (GMT+3)   |  
       

The Ukrainian flat steel producer Ilyich Iron and Steel Works of Mariupol (Ilyich) has been forced to suspend all its investment projects, including the reconstruction of its heat and power station, as well as the construction of a pulverized coal injection facility, in order to achieve stabilization of the economic situation at the mill. As a result of this suspension, about 3,500-4,000 of contracted construction workers remain without work, Ilyich CEO Vladimir Boyko said.

"Currently, Ilyich has achieved production stabilization; we have orders, but not so many as to maintain past output levels," Mr. V. Boyko stated. The mill's crude steel output now stands at 50-55 percent of the July production level, the BF shop is working at 35 percent of its capacity, while its daily pig iron output amounts to around 5,000-6,000 mt. "We will continue through November and December, but what will happen in January still remains uncertain," Mr. Boyko added.

Ilyich has also been forced to cut back employees' salaries by 35-40 percent of June-July levels, to remove all additional payments and to reduce the number of social programs, in order to avoid layoffs during the period of crisis.

"We are now demanding the repayment of our money from Prominvestbank, for this is the money of our working collective, and these funds will help us overcome the hard times," Mr. Boyko stated. "We, the Ukrainian steelmakers, have signed an MoU with the government, but an MoU is not a law. We have to reach an arrangement and to decrease steel prices to the levels of 2007. The government declared that natural gas prices would be stable, but, beginning on November 15, the gas price increased, and we will have to buy it at the new prices," added Mr. Vladimir Boyko.


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