Bosnia's sole aluminium smelter Aluminij Mostar will cut jobs and kick-start additional cost savings after reporting a first-quarter loss of 20 million Bosnian marka ($13 million), double what it had expected for the whole year.
The country's top exporter, located in the southern town of Mostar, blamed the loss on higher electricity prices and volatile raw materials costs. It had expected a loss of 10 million marka for 2012.
Aluminij did not specify the number of job cuts but did say it would delay new borrowing, abolish overtime and start an early-retirement programme.
"The alarm has set off, and unless these measures bring results by July 1, we will launch further cuts," it said on its website.
In March, Bosnian utility EPHZHB, which supplies Aluminij with 125 megawatt-hours of electricity a year, increased prices by about 12 percent.
Aluminij, with annual output of around 160,000 tonnes of metal, posted a profit of 1.2 million marka last year.
It planned to finish this year an upgrade of its foundry to boost annual output by 30,000 tonnes, much of it destined for long-term partner Glencore International. It is now unclear whether it is in a position to proceed with the plan.
Much of Aluminij's output goes to the construction and auto industries in the European Union.
($1=1.538 Bosnian marka)
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