EU’s Main Fertilizer Producer Faces Closure Due to Western Sanctions
TEHRAN (Tasnim) – Lithuania's major fertilizer plant, Lifosa, controlled by Russia's EuroChem Group, may be forced to shut down due to Western sanctions, putting hundreds of workers at risk of unemployment, warned the head of the company's trade union on Monday.
Lifosa, one of the EU's largest and most advanced phosphate fertilizer producers, is a subsidiary of EuroChem Group, a Russian chemical giant based in Switzerland. The plant, located in Kedainiai, Lithuania, could lay off a significant portion of its highly skilled workforce if the company proceeds with its plan to close the factory, according to RT.
Kestas Slama, Lifosa's union chief, stated, "A minimum of workers will remain at the plant to supervise the units and the premises during the conservation of the plant." While he did not provide exact figures, he estimated that "it will be 80% of the staff."
On Monday, EuroChem announced its intention to initiate a conservation process at the facility due to the impact of the sanctions. CEO Samir Brikho revealed that the company plans to mothball the plant starting from October.
The fertilizer manufacturer was affected by EU sanctions imposed last year against Andrey Melnichenko, who was a member of the company's board of directors at the time. However, the firm announced Melnichenko's departure from its board and beneficiaries in March 2022.
Despite this development, Lifosa's operations have been severely impacted by EU sanctions, according to Samir Brikho. The plant has incurred losses of over €100 million ($109 million) due to international penalties, as stated by CEO Andrey Savchuk last month.
"The status of the company subject to sanctions means that Lifosa is constantly faced with disruptions in the supply chain and a shortage of raw materials, which leads to reduced capacity and unplanned shutdowns," explained Savchuk.
EuroChem Group operates fertilizer production facilities in various countries, including Brazil, China, Kazakhstan, Russia, Lithuania, and Belgium. Lifosa, its Lithuanian unit, employs approximately 15% of the working-age population in the Kedainiai region, and the manufacturing facility also provides heat to the area.
