Czech Vitkovice Steel closes steel plant in Ostrava

1 October 2015

Vitkovice Steel has shut its steel plant in the northeast of the Czech Republic, as planned, after deciding that needed investments would be too costly, the company said on Wednesday.

Vitkovice had announced the expected closure earlier this year and said on Wednesday that it would focus future production on heavy plates at the rolling mill adjoining the steel plant.

The firm said it would replace the missing output after the closure with deliveries from European and Russian suppliers.

The steel plant in the industrial city of Ostrava had annual capacity of 950 kilotonnes of steel. Czech firms produced 5,360 kilotonnes of steel in 2014.

"Closure of the steelworks will allow us to further develop the operations of our company," Chairman Dmitrij Scuka said in a company statement.

A group of private investors bought Vitkovice from Russian group Evraz in 2014.

The plant is located in the country's industrial northeast, where unemployment is much higher than in other regions and the threat of closures of coal mines and related industries have been a worry for state officials.

With the steel plant's closure, Vitkovice will let go 271 employees by the end of the year, cutting its workforce to 834.

Each departing employee will get up to 450,000 crowns ($18,571.25) in severance on average, the company said.