Carpatcement sends half of employees into technical unemployment

Carpatcement Holding, the domestic subsidiary of Germany’s HeidelbergCement group, sent 582 employees on technical unemployment in November and December, around half of its total headcount, as a result of the falling sales volume starting October.

The German group’s decision to shut down production in November and December contrasts with what has happened in recent years, when plants had to work even on New Year’s Eve because they could not meet demand.

The company will see its turnover contract by around 20% on the cement segment this year, to some 235m euros, according to the latest estimates.

Unemployment periods are made up of 12 and 15 days.

The sales downward trend will maintain in the first quarter of 2010, with consumption due to halve from the same period of 2009 and employees could be sent on technical unemployment again.

“After the plant repair campaign ends, depending on the progression of the sales volume in 2010 and on the production resumption date, we will make a decision,” Mihai Rohan, chairman and general manager of Carpatcement Holding, told ZF.

The company in the first nine months of this year saw its sales go down by 16% in terms of volume against the same period of last year. Average prices rose this year after the company introduced new types of more expensive products and sold more cement in sacks, which is more expensive.

Instead, total turnover (cement, aggregates, concrete) will register a 30% decrease in euros this year, to 262m euros as a result of the falling investments in offices, commercial, logistic projects, or hotels and the low number of infrastructure projects.

“(…) The steepest drops were posted on the aggregate and concrete markets. Of the two markets, the concrete one is the hardest hit as the problems of both markets cumulate at the level of this market, since aggregates hold a significant weight in the production cost of a cubic metre of concrete,” state Carpatcement Holding representatives.