Lifosa, a fertiliser manufacturer in Lithuania owned by the Russian oligarch Andrey Melnichenko, has had its bank accounts frozen after being put on an EU sanctions list, according to the mayor of Kėdainiai where the plant is based.
“At the moment, the plant is functioning, nobody is firing people today, but their [Lifosa’s] accounts have been frozen and their activity has been suspended,” Valentinas Tamulis told BNS on Thursday.
The company itself said on Thursday it was continuing its operations for the time being and would seek to protect jobs. It later confirmed that its accounts had been frozen.
“We are closely monitoring all international processes and events, and we are consulting with the responsible Lithuanian institutions on the situation in the region. We have foreseen and prepared for various scenarios for the company’s further activities, and we will follow them by taking the international situation and the market situation and the situation in Lithuania into account,” Rimantas Proscevičius, Lifosa's CEO, said in a statement.
The Kėdainiai mayor says the fertiliser production plant employs over a thousand people and also provides heating to the town.
Nauris Vilkevičius, the PR officer at Lifosa, says the company continues to provide heating to Kėdainiai.
Since 2014, Lifosa’s shares have been in the ownership of the Russian business group Eurochem, registered in Switzerland, which is owned by Melnichenko, an oligarch with links to Russian President Vladimir Putin.
Lifosa posted 315.2 million euros in revenue for 2020, down 10.6 percent from the previous year. The company’s audited net profit inched down 6.4 percent to 16.8 million euros.
Lifosa exports around 98 percent of its products, mostly to European markets: France, Germany, the UK, Belgium, Ireland, Ukraine, Spain and Poland. The company also exports its production to other continents.
Company’s future unclear
Asked to comment on Lifosa’s future, Lithuanian Prime Minister Ingrida Šimonytė said she did not want to speculate.
“Now, we have a lot of uncertainty, both in terms of the global trends, in the oil markets, and in terms of the application of the sanctions, so I wouldn’t want to speculate,” she told reporters at the parliament on Thursday.
Meanwhile, Foreign Minister Gabriel Landsbergis said he was aware of Lifosa’s plans to go to court over the sanctions. He also suggested that the government would look for ways to help Lifosa’s employees.
“The company [...] has the right to go to court and check whether the sanctions were applied correctly. As far as I have heard, this may be the way to go,” the minister told reporters.
He also pointed out that the Belarusian-owned Belorus sanatorium in Lithuania’s Druskininkai had previously followed the same path, but eventually lost the case.
The government and the ministries must monitor the situation, Landsbergis said.
“The government, and especially those ministries that can directly help, I think, they have to take the problems that people are facing seriously and help them,” Landsbergis said.
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