Production at Serbia’s largest petrochemicals group, HIP Petrohemija (Pancevo; www.hip-petrochemija.com), will resume in mid-September, according to the country’s economics minister, Mladjan Dinkic. The news follows completion of a government-backed feedstock supply and debt rescheduling deal with Russia’s Naftne Industrija Srbije (NIS), controlled by Gazprom and the Serbian arm of Russian company Lukoil (www.lukoil.com). The two companies cut off all supplies to HIP in late June, forcing a stop to production – see Plasteurope.com of 17.07.2009.

Following negotiations with the company’s unions to avert a strike, Dinkic agreed to press for a substantial redundancy package as part of a EUR 10m funds injection for the struggling company. Around 500 positions are planned to be trimmed from the 2,300-member workforce. A new chief executive was to be appointed this week.

In addition to the more than EUR 100m owed the two Russian-controlled groups, HIP is reported to have outstanding debts of around the same amount to several other companies. Altogether, the company’s debts are said to exceed its assets. Dinkic is currently negotiating long-term agreements with the two feedstock suppliers. NIS is believed to have agreed to supply naphtha at a 20% price reduction, and Lukoil for half the previous price. This will allow the petrochemicals producer a naphtha throughput volume of around 30,000 t per month.

HIP has been up for sale for some time, but is unlikely to attract a buyer before restructuring is completed.