Pula Steel sends 190 workers on unpaid leave
Onalenna Kelebeile | Thursday July 7, 2016 18:00
The unpaid leave is effective from July 1 to July 30. The company management explained in an interview that the closure has aggravated their already weak current financial situation and placed the company in a position where it cannot meet its financial commitments.
The closure means that the company is losing 100 tonnes per day of production and P70,000 a day towards fixed costs and has a negative effect on gross profit amounting to P100,000 a day.
Corporate services director, Brian Mosenene explained that there has been no production since June 7 hence a serious challenge in the company’s working capital.
“With the plant closed we cannot afford to pay July salaries, but instead of terminating workers contracts we decided to place them on unpaid leave.
We will recall all of them once the operation starts. We followed all the labour processes and discussed it with the employees,” he said. He added that 190 employees are affected while only 15 were retained to do minor jobs on the plant.
He explained that inspection by the department on Pula Steel was carried out in February and it was recommended that the company complete the installation of pollution control equipment by the end of June.
“We wrote a letter requesting extension of the deadline, but there was no response until officials arrived and closed down the company on June 7 instead of the agreed end of June,” he added.
He noted that the installation of the equipment is underway and it is expected to be completed by end of July. “But as for the reopening of the plant we do not know because it is the decision that will be taken by government,” he added.
On how the plant was able to start operating without a pollution control system in place, Mosenene explained that the company was granted waivers in a number of areas to run the plant and start producing while completion of some aspects of the project were ongoing. “We hope that compliance to the administrative closure will be met by the end of this month and we hope that we will be allowed to operate the plant,” he added.