The Board of Liepajas Metalurgs approved austerity measures plan

On the 4^th of April the Board of Liepajas Metalurgs approved austerity measures plan prepared by the company’s work shops and departments. The plan involves decrease of production and administrative expenses and daily control. The decrease of production expenses involves a complex of measures for saving of energy resources worked out by Energy Work Shop, proposals of the Melt Shop to replace more expensive materials by cheaper ones while maintaining the product quality, improvements worked out by the Rolling Mill Work Shop for the slitting technology that will also give a financially measured effect.

The decrease of administrative cost concerns the expenses for transportation, communications, business trips etc. The representation expenses are practically cancelled completely. The mentioned austerity measures will give the company more than four million LVL in savings until the end of the year.

Sergej Zaharjin met the company work personnel

Immediately after the Board meeting the Chairman of the Council of Liepajas Metalurgs Sergej Zaharjin had a meeting with the company work personnel. He frankly described to several hundreds of people the existing situation in European metallurgical market and the financial status of the company. S. Zaharjin informed about the audit that had been conducted in the company and the support required from the state. The main part of discussions was obviously devoted to the steps that the company management would take to overcome the crisis situation. Also the topic was discussed about the negotiations of the management with creditors for finding a joint solution. The workers were also informed about negotiations of the shareholders - S. Zaharjin and I. Segal – with potential investors.

Sergej Zaharjin underlined that his single target is to preserve the company by any means and once more publicly affirmed that he always considered his shares of the company as a contingency reserve, which both he and I. Segal are ready to sell in case of necessity in order to obtain the means that would allow the company to continue its business activity and preserve work places.

At the same time S. Zaharjin pointed out that the potential investors are interested in the attitude and possible support of the state authorities since everybody knows that a number of EU states already provided support to their metallurgical companies. For example last week Slovakian government exempted American U.S.Steel company in Kosice from some of the taxes and offered considerable discounts for electric energy prices, with the purpose to keep the production company running.

The work personnel of Liepajas Metalurgs expressed their support to S. Zaharjin in the struggle for the company survival and the head of the trade union Janis Grava conveyed readiness to address the state highest officials with the request to support JSC Liepajas Metalurgs.

Līga Šenfelde
Assistant of chief Economist
63455926, shenfelde@metalurgs.lv