BRATISLAVA, December 15, (WEBNOVINY) — The Slovak Association of Chemical and Pharmaceutical Industry warns about the possible halt of production in the bankrupt chemical company NCHZ and following layoffs which would hit all of its 1,800 employees. The companies clustered in the association believe that it might happen if the period of uncertainty amidst the company’s bankruptcy proceedings does not end as soon as possible. “Prolonging the sale process, its constant questioning and efforts of lobby groups to push through their partial interests might result in the shutdown of the plant and layoffs“, said the association. It specified that this threat is hovering not only over almost 2,000 employees of the company but that further about 5,000 jobs are endangered indirectly in related businesses.
The association said that current discussions around the bidding process might make business partners uncertain, which might directly threaten production or stop some technologies. “We seriously doubt whether in the event that the production is stopped it would be possible to re-launch the chemical company. Moreover, it might happen that meanwhile the company’s rivals will take over its the market positions. The association insists that currently it is not a problem to make chemical products but to sell them. The market share is the most valuable thing the company has and it is necessary to realize that most Slovak companies including chemical firms, paper mills, and other industrial businesses are prevailingly supplied with products from NCHZ. Halted production in NCHZ would threaten their supply to clients or make it more expensive.
NCHZ got into trouble last year after the European Commission decided that the plant, as well as its former parent company, must pay a fine of EUR 19.6 million due to a cartel agreement with other European chemical companies. Between years 2004 and 2007, they set prices and divided the market with calcium carbide and granular magnesium in the large part of the European Economic Area, according to the European Commission. After being fined, NCHZ filed for bankruptcy and the court agreed.
In late November, the creditors committee of the bankrupt chemical company NCHZ did not approve the sale of the company to the only bidder, the limited liability company M-Energo, M-Energo offered EUR 2 million for the bankrupt company. The only known opponent of the sale of NCHZ to M-Energo was the government’s privatization agency, the National Property Fund (FNM). It was concerned that if the chemical company is sold, it will lose the possibility to satisfy its claim, which exceeds EUR 22 million.
Based on the law on strategic companies adopted by the previous government, the state can buy NCHZ as well. However, Economy Minister Juraj Miskov previously stated that the government does not plan to use the law on strategic companies in the case of NCHZ.
The company is a supplier of chemical materials for a wide range of industries. Production of chemical products is provided by manufacturing facilities of three production units. The company manufactures and sells products on the basis chlorine, calcium carbide and industrial gases, and polyvinyl chloride (PVC). The company exports its products to more than fifty countries worldwide.
SITA