Industry grinds to halt as gas runs short

Industry grinds to halt as gas runs short
Published: 09 January 2009

The impact of the Russia-Ukraine gas crisis on industry grew yesterday, as energy-intensive manufacturers - from cars to cement and steel - slowed or even shut down production.

The ill-effects were felt most keenly in south-eastern Europe, with countries such as Slovakia and Bulgaria badly affected by the dispute. Poland faced minor disruption and developed countries such as Austria, Italy and Germany reported no impact on industry.

In Bulgaria, which relies exclusively on Russian gas, Sergey Stanishev, the prime minister, said more than 70 large and medium companies had been disconnected from the network and another 150 were working restricted hours. Ivo Prokopiev, chairman of the confederation of employers and industrialists, said: "Bulgarian industry has effectively been knocked out by the cut-off of gas supplies."

Philip Rombaut, chief executive of Agropolychim, the biggest Bulgarian fertiliser producer, which shut down on Monday, said: "We are losing €700,000 ($959,000, £631,000) a day of turnover - and getting just enough gas to prevent our machinery turning into scrap."

Slovakia also takes all of its gas from Russia, and has been forced to limit supplies to industry. Kia, the Korea-based carmaker, shut down production there yesterday until gas flows resume.

The countries of the former Yugoslavia have also suffered from the Russian gas cut amid icy weather.