One fifth of employees laid off in Northeast Estonia have new jobs; VKG also rehiring

VKG Kiviter refineries in Ida-Viru County. (VKG)
7/28/2016 2:32 PM
Source: BNS
Category: Business

According to the Estonian Unemployment Insurance Fund (UIF), of the over 1,000 people to be laid off in Northeastern Estonia by mineral fertilizer producer Nitrofert, oil shale producer Viru Keemia Grupp (VKG) and energy firm Eesti Energia since last summer, 20 percent have since found new jobs. VKG has also announced that it will rehire a total of 350 laid off employees in preparation for reactivating its two mothballed Kiviter refineries.

Anneki Teelahk, director of UIF’s Ida-Virumaa Department, told BNS that around 700 of those who had been laid off are still clients of the unemployment fund.

According to Teelahk, there were many factors involved in why these former employees had not yet found new work, one of which was the fact that VKG and Eesti Energia both paid out generous benefits to those laid off, allowing people to take more time in seeking a new job. Another contributing factor was the fact that people were seeking jobs offering the same level of pay, but such jobs were not easy to come by.

In addition, many people were taking advantage of services offered by the UIF to learn new trades, said Teelahk.

According to the department director, a new wave of layoffs was not to be expected in Ida-Viru County in the near future. Moreover, VKG has begun hiring again after deciding to bring its two Kiviter refineries back online, and has said that it will hire back 350 of the employees laid off during the past year.

VKG refineries to be running at full capacity by early fall

The Kohtla-Järve-based oil shale chemical group has begun hiring in preparation for reactivating its two closed-down Kiviter refineries.

"We hope to have all positions filled during August," VKG communications chief Irina Bojenko told BNS. "The process of relaunching will take a month: activation will be followed by trial runs, after which full capacity will be achieved." VKG plans to have the two refineries working at full capacity by mid-September.

The company has already rehired some of the engineers it had laid off earlier this year, and another group of former employees is expected to return to work at the beginning of August, said Bojenko. Almost all miners have been invited to return as well, as the company will be increasing oil shale mining volumes in connection with the refinery reactivations.

According to the communications chief, VKG will take back all 350 laid-off employees on previous terms and wages.

VKG CEO Ahti Asmann told BNS at the beginning of the month that reactivating the two oil shale processing plants that utilize Kiviter technology would only reduce VKG's losses, and the price of crude oil would have to rise further in order for hte company to break into profit.

"Because of the low price of oil, reactivating two plants will not cover all operational and fixed costs," he said. "No oil shale energy business can earn a profit at such prices."

In a region of Estonia with the highest rates of unemployment from month to month, Nitrofert laid off all 421 of its employees last year, while in January VKG announced that it would be laying off nearly 500 of its employees and Eesti Energia laid off 114 employees last summer and announced at the end of the year that another 150 layoffs were to follow.

Editor: Aili Sarapik

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