The company said in a statement late Wednesday that it will prepare a plan to shut down a predominant part of key primary aluminum production facilities, thus drastically reducing the electricity consumption, resulting in a significant reduction of the Alro workforce.
“The Board of Directors of Alro no longer supports the 2014 income and expenses budget, as previously proposed for the approval of the General Shareholders Meeting to be held on March 7, 2014, because of the newly increased quota for green certificates,” the company announced in a press release.
Alro said that, on February 26, the quota for green certificates increased to 0.224 GC/MWh, according to an order of the the National Authority for Energy Regulation (ANRE). This quota must be paid by all energy consumers as part of the subsidy scheme to support renewable energy production in Romania.
“All the signals from the market show that the speculative bubble of the subsidy for renewables will continue even more aggressively. The increase of the eco-taxes was determined by the commissioning of new photovoltaic (a 2000% increase in capacities over the last year) and wind generation capacities installed by the end of 2013. The principal factors with significant impact are the lack of predictability of the application of the subsidy scheme for renewable energy as well as a significant fall of the aluminium quotations on the international market,” the release reads.
According to the company’s release, the lack of any measures to support the industrial consumers – as lined out in the proposed guidelines issued for public consultations by DG Competition – puts Alro in a position to revaluate all operations for 2014.
“Therefore, the company is forced to prepare a plan to shut down a predominant part of key primary aluminum production facilities, thus drastically reducing the electricity consumption. These measures would involve a significant reduction of the Alro workforce, thus they would be first discussed with the social partners,” the company said.
Alro turned to a negative result in 2013, following a decrease in international metal prices and higher eco-taxes, posting a net adjusted loss of 78 million lei (EUR17.4 million) last year, after a net profit of RON123 million in 2012.
The company’s sales amounted to a little over RON2 billion (EUR457 million) in 2013, down 12% from RON2.3 billion in the previous year.