Bulgaria’s insolvent steel mill Kremikovtzi will part ways with 1900 workers, a company official told Dnevnik. The first group of 400 employees are likely to be dismissed by the end of this month, with the other 1500 lay-offs planned in stages by the end of spring.

The downsizing comes in response to various assessments on labour productivity that have estimated that the plant needs a workforce of 2800 to 4200. The same assessments concluded that the current payroll put off investors.

The company said it officially has 5600 people on payroll at the moment, but the real figure was much smaller because many were on a leave or had engaged in another business, without severing ties with the plant.

The first round of job cuts is expected to take place at Kremikovtzi’s cold rolling facility, which has been offline for almost a year and a half. Workers in operational capacities will keep their jobs.

In the summer of 2008, the steel maker was eyed by steelmaking heavyweight ArcelorMittal, but the bid met the opposition of trade union Podkrepa at the plant, which threw its weight behind Ukrainian billionaire Konstantin Zhevago. But when the financial crisis struck the global steel market in October 2008, the Ukrainian contender pulled out of toiling agreement.

In the meantime, Kremikovtzi’s management said Brazilian CSN is strongly interested in the plant, but the company would not make serious commitments unless it received some investment guarantee. Therefore the Brazilian firm is only willing to buy out the mill’s coke output.

"Even this would be a positive development because the coke gas released during the production process would help us cut natural gas use by nearly 60 per cent," the company said.

Source: Dnevnik