Achema’s decision to temporarily stop its nitrogen fertiliser production was a better option than operating at a loss and eventually going bankrupt, Vidmantas Janulevicius, president of the Lithuanian Confederation of Industrialists, believes. Soaring energy prices may force more companies to follow in its footsteps, he adds.
“No business wants to increase its losses, because sooner or later it will end up in bankruptcy,” he said. “A temporary suspension, looking into the situation and investing in new resources is a more sensible solution than working and eventually going bust.”
More businesses may follow suit as prices for energy resources continue to rise, according to Janulevicius.
Achema announced on August 24 that it was suspending production from September to December, as high gas prices were making its fertiliser products uncompetitive.
The company plans to lay off 5% of its workforce, with the rest to be furloughed.
According to Janulevicius, efforts must be made to prevent sudden price hikes on the electricity market, such as the one in mid-August when businesses spent as much on electricity in two hours as they would normally do in two days. (LRT/Business World Magazine)
