One of the EU’s major fertilizer plants, Lifosa, located in Lithuania and controlled by Russia’s EuroChem Group, is facing the possibility of shutting down due to Western sanctions. The trade union head of the company has warned that if this happens, hundreds of workers would be at risk of losing their jobs.
Lifosa, known for being one of the largest and most modern phosphate fertilizer producers in the EU, operates as a subsidiary of Switzerland-based Russian chemical giant EuroChem Group. The plant, situated in the city of Kedainiai in Lithuania, may have to lay off a significant number of highly qualified personnel if the company proceeds with its plan to close the factory.
Kestas Slama, the union chief of Lifosa, stated that only a minimum number of workers would remain at the plant to supervise the units and premises during the conservation process. While he did not provide the exact figures, Slama estimated that approximately 80% of the staff would be affected.
EuroChem announced on Monday its intention to initiate a conservation process at the facility due to the impact of the sanctions. The CEO of EuroChem, Samir Brikho, stated that the plant would be mothballed starting from October.
The main reason for the potential shutdown of Lifosa is the sanctions imposed by the EU last year against Andrey Melnichenko, who was a board member of the company at the time. However, in March 2022, the firm announced Melnichenko’s withdrawal from its board and beneficiaries.
Despite this change, the EU sanctions have had a severe impact on Lifosa’s operations, according to Samir Brikho. The plant has incurred losses of over €100 million ($109 million) due to the international penalties, as stated by its CEO Andrey Savchuk last month.
Savchuk explained that the company’s status, subjected to sanctions, has resulted in constant disruptions in the supply chain and a shortage of raw materials. This, in turn, has led to reduced capacity and unplanned shutdowns.
EuroChem Group operates fertilizer production facilities in various countries, including Brazil, China, Kazakhstan, Russia, Lithuania, and Belgium. Its Lithuanian unit, Lifosa, plays a significant role in the Kedainiai region, employing about 15% of the working-age population. In addition to fertilizer production, the facility also supplies heat to the region.
The potential closure of Lifosa raises concerns about the economic impact on both the workers and the region. With hundreds of jobs at risk, the local community may experience hardship and a decline in economic activity.
It is important to note that this news reflects the ongoing geopolitical tensions between Russia and Western countries, and the impact of sanctions on businesses with international operations. The consequences of these actions reach beyond political disputes and have real-life implications for workers and communities.
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