Slovakian aluminum producer cuts production, layoffs not yet scheduled
In the event of closure, its ecologically produced aluminum could be replaced by imports from Asia.
One of Slovakia’s largest metallurgical companies, aluminum producer Slovalco in Žiar nad Hronom, is reducing its aluminum production in response to strong growth in electricity prices, record prices for emission allowances, as well as insufficient State compensation via the Environment Fund. Slovalco produces 160,000 tonnes of aluminum per year in its 226 furnaces, consuming 8% of Slovakia’s total electricity consumption. The company first idled 14 electric furnaces, then 11 others.
“Without predictable and fair long-term conditions set by the Slovak government, very difficult times lie ahead,” Ola Saeter, chairman of the board of directors of Slovalco, told Slovak radio. “The worst-case scenario would be to turn off the ovens and stop production.”
Saeter noted that what they want is to have the same conditions for their operation as their competitors in Europe.
A radical increase in the price of allowances of almost 100% has affected all producers of direct CO2 emissions who are forced to buy them. Slovalco asks the state to use the money from the sale of emission allowances to compensate them for the high prices. The current compensation rate in Slovakia is only 2%, while the European average is 18%. Otherwise, Slovalco may have to cease production. In addition, electricity costs represent 40 to 60% of the company’s total production costs.
Slovalco CEO Milan Veselý believes the decision to close the plant could come in about a year if the state does not remedy the situation. This would mean the loss of 500 direct jobs and about 2,000 indirect jobs.
“It would be a real shame if Slovalco, which is one of the best factories in the world, had to leave and the aluminum produced here be replaced by aluminum imported from Asia, for example,” Veselý said on the radio. public.
For the moment, Slovalco does not plan to lay off any employees. It plans to cut production to 80% next year, as it managed to secure a one-year contract to purchase reasonably priced electricity.
Parliament Speaker Boris Kollár and Labor Minister Milan Krajniak pledged to help the factory during their visit on Thursday, September 30. The coalition party will discuss it at the Coalition Council on Monday, October 4.
“It is a responsible employer who last reported an accident at work three years ago,” Krajniak said, quoted by the SITA news wire. “The average monthly salary without executive salaries is € 1,900. Therefore, we want to do everything from the point of view of our ministry and the government to keep these employers in Slovakia. “
Kollár noted that it would be a disaster for the entire region if the aluminum producer were to shut down, which is why he would like to see the Environmental Fund’s compensation system changed. Factories should receive the same amount of money that they invest in the fund.
“The factories put a certain amount of money into the Environmental Fund at a certain price for electricity. If the price rises disproportionately, the plant ceases to be profitable and suffers losses, ”Kollár said, as quoted by the TASR newswire.
Slovalco is the only aluminum producer in Slovakia which currently focuses on recycling aluminum; its production is much more ecological than that of primary aluminum producers. The company is majority owned by global aluminum giant Norsk Hydro. Penta Investments is a minority shareholder, owning 45 percent of the shares through Slovalco Invest.
1. Oct 2021 at 13:30 | Compiled by spectator staff