Achema’s decision to temporarily stop its nitrogen fertiliser production was a better option than operating at a loss and eventually going bankrupt, Vidmantas Janulevičius, 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 told LRT TV on Wednesday. “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 Janulevičius.
Achema announced on Wednesday that it was suspending production from September to December as high gas prices are making its fertiliser products uncompetitive.
Read more: Lithuania’s biggest fertiliser maker suspends production over soaring gas prices
The company plans to lay off 5 percent of its workforce, with the rest to be furloughed.
According to Janulevičius, 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.
The wholesale electricity price in the Lithuanian bidding area of the Nord Pool power exchange hit a record high of 4,000 euros per megawatt-hour (MWh) in the evening of August 17.
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