RIYADH, 23 February — Gulf Metal Alloys, a joint-stock company, has fired 100 of its expatriate employees after it suffered heavy losses due to the increasing electricity rates.
The company's general manager Mr. Hamad Ali Al-Ghasham said that the next step would be the dismissal of 50 Saudis on the company's administration staff.
He said the persisting losses mandated such action. The operation costs are increasing, leaving the company's future at stake. There is a possibility that they will be declared bankrupted and liquidated if the problem is not settled with the Saudi Electricity Company and the Ministry of Industry and Electricity.
Mr. Ghasham added that more employees will be discharged because the company is no longer able to pay their wages. The company is also considering giving some of them unpaid vacations till the problem is resolved.
The company's operation costs had significantly increased lately due to an increment in electricity tariffs causing the factory to come to a halt.
The cost of power was estimated to be around 30% of the total company's operation costs because of the electrical ovens used in the factory. Bankruptcy is likely to be declared within the coming three months if the Saudi Electricity Company doesn't agree on special tariff rates or if the company receives governmental financial support.
The company's founders are currently negotiating with the Saudi British Bank, the financier of the company's factory construction, to assign a consultant office to explore the possible solutions. Last week the Ministry of Industry held a meeting for the shareholders to listen to their views on the issue. The Board of Directors also enlightened them last month on the company's situation and its losses. The main shareholders are SABEC (15%), SAFCO (5%), Qatar Downstream Industries (10%), Al-Ahsaa for Development (10%), Gulf Investments (10%), Gulf Industrial Investments Company (26%), Samincore from South Africa (7%). The remaining 17% is shared among various investors.
