AMMAN, Nov 4 (Reuters) - Lafarge Jordan Cement said on Monday it was cutting 200 jobs to enable it to remain in business after accumulating losses of 62.2 million dinars ($87 million) from the closure of one plant and the partial shutdown of another.
Jordan’s cement sector, with a capacity of nine million tonnes, is saturated as demand has plunged to around 4 million tonnes and local manufacturers face competition from regional markets where clinker production costs are much lower.
LafargeHolcim Group owns 50.3% of the Jordanian company, with the government’s pension fund holding 21.8% and another 10% held by a Moroccan investor.
“The decision is part of the company plan to ensure its continuity,” Lafarge Jordan Cement’s chief executive Samaan Samaan told Reuters, adding that the board decision to reduce its 550 workforce entailed generous termination packages.
Lafarge Jordan Cement posted 34.6 million dinars in losses last year, compared to 33.3 million dinars a year earlier, hurt by a depressed construction market that has seen a decline in large infrastructure and housing projects, Samaan said.
Jordan’s oldest cement firm was forced six years ago to close its main Fuhais plant, with a two million tonne capacity, near the capital after pressure from local residents prevented it from switching to lower cost alternative fuels.
It also had to pay 45 million dinars in compensation to residents that worsened the losses, Samaan said, adding this “negatively affected the company’s competitiveness”.
Lafarge Jordan Cement said one of two production lines in the only operating plant in Rashidiya in southern Jordan has also been closed since mid-2010, due to a drop in demand. (Reporting by Suleiman Al-Khalidi; Editing by Alexander Smith)