Over 1,000 employees of Romania's largest chemical producer Oltchim started a protest outside the production unit in Ramnicu Valcea on Thursday morning ( March 28 ), as they were unhappy with their unpaid salaries and the news that they would be laid off, before the company's reorganization plan was approved. Oltchim is currently insolvent and going through a reorganization. Around half of the protesters come from the petrochemical division in Pitesti, which is also part of Oltchim, and they too complained of unpaid salaries and of their division still not being functional. This is the second such strike after the one at Mechel Targoviste in recent weeks.

Employee unions say the production facility in Ramnicu Valcea is working at only 6 percent of its capacity, and the EUR 45 million promised as working capital never came. The money would have allowed an increase in production to 65 percent, which would have also kept employees working. “There are people here who have been struggling to live in the last three months, have bank loans, children to feed, it is a social catastrophe,” said employee union leader Mihai Diculoiu. He went on to say they just want to know what is the real situation, whether they should go home with three compensation salaries, or continue working.

Yesterday (March 27 ), around 500 people from Oltchim and its petrochemical division blocked traffic in Ramnicu Valcea and in Pitesti respectively, and asked Government representatives to come down and present them the plan for Oltchim.

Oltchim's preliminary financial results for 2012 show that losses doubled and sales halved last year. The insolvent chemical producer, which went through a failed privatization attempt last year, saw losses increase to around EUR 90.5 million in 2012. Meanwhile, sales dropped to under EUR 171 million last year.

Production stopped at the factory last year for extended periods of time, which was reflected in the operating losses – some EUR 62 million, or three times bigger than in 2011.

By December 31, 2012, Oltchim's total debt had reached over EUR 620 million. The Romanian Government approved Oltchim’s insolvency on January 23, with a consortium of Rominsolv SPRL and BDO Business Restructuring RPRL as judiciary administrator. This came soon after the state failed to privatize Oltchim in a first privatization stage, which was won by media mogul Dan Diaconescu, who then failed to pay the pledged amount.

The state announced it was seeking European Commission (EC) approval to grant the factory state aid. The government is requesting approval for some EUR 45 million in state aid for Oltchim in the much delayed and still ongoing privatization process of the state owned facility.

editor@romania-insider.com