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Baikal pulp mill to cut 60% of staff, may shut down

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IRKUTSK, October 31 (RIA Novosti) - The Baikal Pulp and Paper Plant, which halted production in early October, will cut 60% of its staff and could completely close, a source in the company said on Friday.

The plant, which originally halted production due to a lack of raw materials, has moved back the resumption day to November 10 with 1,370 staff out of 2,300 to loose their jobs.

"The lists of people subject to redundancy are ready," the source said, adding that the order for the layoffs had not yet been signed by the mill director.

Under pressure over waste emissions into Siberia's Lake Baikal, the mill recently switched to a closed water cycle. However, management has said the new production process prevents the manufacture of bleached pulp, costing the business 80 million rubles (nearly $3 million) a month.

"We have started getting ready for mothballing the enterprise. The mill could stop completely by the end of the year," the source said.

The first warnings of layoffs at the plant were made in early October, when department heads were informed.

The company financial predicament, first related to "the crisis on external markets and temporary hardships of getting payment for export products," further deteriorated in September when it switched to the closed water cycle to protect the lake.

The company plans to ask local authorities for permission to return to previous procedures, a step that would be strongly opposed by environmentalists. Lake Baikal, the world's largest body of fresh water, is a UNESCO world heritage site.

The Baikal pulp mill produced around 200,000 metric tons of pulp and 12,000 metric tons of paper last year. It is owned by the timber industrial company Continental Management (51%) and the State Property Committee of Russia (49%).

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