Usiminas to cut production, let go 4,000 workers at Cubatao mill

Friday, 13 November 2015 01:43:30 (GMT+3)   |   Sao Paulo
       

After announcing in October its decision to temporarily halt production at its steel shop, sintering and coking units at its Cubatao mill, Usiminas announced this week it will lay off about 4,000 direct workers.

Usiminas needed to ask the help of police in the city of Cubatao in order to calm down protesters who prevented other workers not joining the strike to enter the mill. Brazil’s labor ministry, Miguel Rosseto, asked Usiminas to hold the dismissals for about 120 days, until December, but local media said the topic hasn’t been decided.

In addition to the scrutiny Usiminas has been facing from different sides, BNDES, Brazil’s development bank, from which Usiminas borrowed money, is asking the company’s CEO, Romel Erwin, and Marcelo Gasparino Silva, president of Usiminas administration council, to explain the dismissals, even despite the obtaining of money from the bank in the past few years.

In meeting with investors this week, Usiminas said the current scenario of weak demand and weak competitiveness “demand structural adjustments in scale and productivity.”

The company said domestic consumption of flat steel in the first nine months of the year declined 18 percent, year-on-year, and there are “no perspectives for a recovery.”

The president of Brazil’s steel institute, IABr, Marco Polo, said during the Alacero conference, held this week in Buenos Aires, that Usiminas’ situation reveals the complexity the Brazilian steel segment currently faces. The executive said IABr is currently working on a study, which will show the situation of the Brazilian steel segment. “I assure that it [the situation of Brazil’s steel segment in the study] will be even more dramatic,” he said.

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