13.2.2015
Ostrava, February 13th, 2015. The management of VÍTKOVICE STEEL, a.s. (hereinafter referred to as the Company) and the Regional Authority of the Moravian-Silesian Region have agreed not to extend the integrated permit required for the continued operation of the steel shop. As a result, the Company will close down the steel shop by September 30th, 2015. The Company sees this step as the end of a chapter in the life of the firm and remains focused on the challenges of the future, which it proves by investing in production technologies valued at approximately 300m CZK in 2015. After several years, the Company has once again achieved positive EBITDA results and is beginning to harvest the results of many years of work aimed at transforming itself and reducing its costs.
Given the present operating conditions of the steel shop and the expected future development, the Company considers the decision to close down the steel shop as the best possible solution for maintaining long-term production in the future. The laid off employees will receive a severance package defined by the Labor Code and the collective agreement. Depending on the length of their individual service, in addition to a legally defined redundancy pay of two average monthly salaries, workers can receive compensation amounting to 12 times the average monthly salary, plus up to 70,000 CZK in the form of a single social contribution.
"To some extent, we will use the experience and expertise of certain employees and offer them a position elsewhere within the firm. Severance payments are defined primarily by collective agreement and allow us to say goodbye with dignity to people who have worked very hard here and will have to leave," said Dmitry Ščuka, Chairman of the Board of Directors. The Company offers a social program to help ease the workers’ departures and assist them in their search for new jobs by offering career, psychological and financial counseling and organizing recruitment days, retraining courses and internal transfers. The number of employees who will be laid off has not been determined yet. It will be affected by e.g. internal transfers, retirements, etc.
The Company’s long-term objective is to reinforce its position as leading producer of high-quality heavy plates in Europe. "The situation in demand for rolled steel products is not favorable, but we stand on a solid foundation and if someone is to succeed in the market, it will be VÍTKOVICE STEEL. Our main advantage lies in our ability to instantly adapt to the market conditions and customer requirements," said D. Ščuka. The Company is aiming its effort at minimizing the negative impact of the closure on the Company and its related operations. Slabs, intermediate products necessary for the manufacturing of heavy plates, are now partially manufactured in the Company’s steel shop but will be completely replaced by slabs from other EU producers as of October.
The Company remains an integral part of the Moravian-Silesian region, towards which it feels a strong social responsibility. It has been a long-time partner of HC VÍTKOVICE STEEL, a team that plays in the national league, and a supporter of the Moravian-Silesian Region through its VÍTKOVICE STEEL Charity Fund (formerly EVRAZ Charity Fund) since 2006. Last year this Fund granted a total of nearly 7m CZK to non-profit organizations and private recipients to support their projects. The VÍTKOVICE STEEL Charity Fund is preparing a new offer for applicants for financial support, which is to be released in March 2015.
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Contact for Media:
Jaromír Krišica
spokesman
+420 603 543 572
press@vitkovicesteel.com
www.vitkovicesteel.com
