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Serbian petrochemicals firm stops plant over debt

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BELGRADE, June 24 | Wed Jun 24, 2009 8:26am EDT

BELGRADE, June 24 (Reuters) - Serbia's main petrochemicals producer said it would halt production for one month due to lack of funds to buy gasoline, it's main raw material, the Tanjug news agency said on Wednesday.

The state-run Petrohemija owes about 200 million euros to its suppliers, including Russian-owned Naftna Industrija Srbije (NIS) and Serbia's branch of Lukoil (LKOH.MM) and the two have stopped gasoline deliveries due to the debt.

"It will be a month-long temporary delay until the end of talks between the company, the government, NIS and Lukoil about uninterrupted supplies," Petrohemija deputy chief executive Ljubenko Martinovic was quoted as saying by Tanjug news agency.

Last month the Serbian government recommended the restructuring of HIP Petrohemija, located in the town of Pancevo, 13 kilometres (8 miles) north of Belgrade, including the sale of three redundant facilities and a 20 percent cut in jobs. The company currently employs 2,500 people.

The company's trade unions said they will launch a general strike unless production is restarted within a month.

"All three unions will participate," Misa Faraga, the head of Petrohemija's branch of the Independent Syndicate said in a report carried by Radio Pancevo. (Reporting by Aleksandar Vasovic; Editing by Greg Mahlich)

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