Will one of Hungary’s biggest industrial companies shut down within weeks?
Due to a lack of governmental aid, the biggest Hungarian ironworks could close down within weeks. This would indirectly affect tens of thousands of people’s jobs.
The company is currently providing jobs for roughly 4,500 employees, and tens of thousands more of those who are working for the group’s suppliers, subcontractors, and partners. Dunaferr intends to fulfill its contractual obligations and continue to employ its people, writes Index.
Started during socialism
The ironworks was founded in 1950, under the socialist regime, and the whole town of Dunaújváros was built around it. With the approach of the end of state socialism, they were already planning crisis management in the 1980s. Although the transition was not completely smooth, the company continued to operate. The state slowly backed out of the industry, and by 2010, there was partial privatisation.
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Mounting problems
Dunaferr started facing problems years ago, due to the impact of the COVID-19 pandemic and the increasing raw material prices. Following the pandemic, it only operated at 30-50 percent capacity, which was not profitable. Consequently, it went under supervision because of liquidity problems.
Now Dunaferr announced the situation had become untenable. After the shutdown of one blast furnace a few weeks ago the company was forced to shut down the other one as well. Their partner (Donau Brennstoffkontor GmbH (DBK)) unexpectedly refused coke delivery, causing further problems. DBK must start delivering the required amount of coke within a week. Otherwise, the company cannot keep operating.
Whether Dunaferr will continue to operate and provide jobs to all its employees and partners, will be decided in a week. It depends on DBK and the government’s decision on interfering.
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Source: Index