Romanian aluminium smelter Alro (BVB: ALR) has notified its investors that it will reduce its production of primary aluminum by 60% next year, according to a note filed to the Bucharest Stock Exchange (BVB). In the context of the "exceptional situation on the energy and gas markets,” the company's Board of Directors decided, that the production activity of primary aluminium will be reduced next year (2022) from five to two electrolysis halls. 

“Technological measures will be implemented to allow a quick and efficient restart when energy market conditions return to normal,” the statement reads.

In 2022, measures will be implemented to reduce costs and streamline the activity, and the quantities of primary metal that will no longer be produced will be partially offset by recycled metal or primary metal purchased from third parties.

The company placed bids in 84 auctions on the local electricity exchange over the past three months, aiming to secure sufficient quantities for functioning next year - but in 82 of the auctions, there were other buyers willing to pay more, according to data consulted by Economica.net.

The management of the company does not currently consider lay-offs of the employed staff, but only measures for the efficient use of labour, measures that may include periods of technical unemployment [or the outrunning and cumulation of some revisions and repairs]. 

The company says that some of its suppliers and customers will be affected by the proposed measures, so it plans to engage in constructive discussions with them to reduce the impact and ensure the conditions for the resumption of capacity.

In terms of products portfolio, the company intends to maintain or even increase the portfolio of processed products and reduce the portfolio of primary products, so as to result in a balanced and efficient production mix.

Alro's shares went down by 3.7% on the Bucharest Stock Exchange on Tuesday, December 28, as the BET index touched a new all-time high. Year-to-date, the company's shares dropped by 19%, one of the weakest performances on the local market.

iulian@romania-insider.com

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