Kazincbarcika, Hungary - BorsodChem has reached an agreement with the Hungarian government to allow it to suspend plans to reduce its workforce as part of the company's restructuring programme, the company announced at the end of February.
As well as implementing several cost-cutting measures of its own, BorsodChem had previously appealed to the Hungarian government to assist the company in eliminating structural disadvantages of the Hungarian economy, for example high electricity prices and insufficient carbon dioxide quotas.
"The chemicals sector constitutes a relatively large part of the Hungarian economy, and the performance of the sector is noteworthy even at an international level," said Nandor Gur, chairman of the Hungarian government's labour and employment committee. "The agreement between the government and BorsodChem is a good example of the role that the government is undertaking in order to save jobs in regions suffering from the effects of the economic crisis," he added.
The Mayor of Kazincbarcika said local government had initiated negotiations between BorsodChem and the government, as the company has been the largest employer in the region for decades -- a region where unemployment is currently above 20 percent.
Noting that finalising the details of the agreement is expected to take "a couple of months," BorsodChem ceo Wolfgang Buechele added: "One thing is certain already: the collective headcount reduction has become avoidable in the short run."
Buechele added that, as part of the cost-cutting and efficiency improvement programme, the company offers early retirement to those employees near retiring age. "The financial resources to cover the costs of the early retirement will be provided by the company," he added.
BorsodChem has both MDI (methylene diphenyl diisocyanate) and TDI (toluene diisocyanate) production facilities in Kazincbarcika and had been planning to expand TDI capacity by 200 kilotonnes per annum (ktpa) by 2009. The global economic crisis is drastically reducing demand for both MDI and TDI, so the expansion is being delayed by at least a year, the company said.
The company will be exhibiting at the UTECH Europe 2009 Exhibition and Conference held in Maastricht, Netherlands, from 28 March - 2 April 2009. BorsodChem said MDI and TDI sales representatives will be available on the company stand. (RD)