On Monday, 28 March, JSC Daugavpils Locomotive Repair Plant (DLRR) and its subsidiaries LLC LokRem, LLC DL Metal and LLC Logkom sent a notification to the State Employment Agency regarding plans to terminate 240 of their employees, as confirmed by DLRR representatives.
They explained that the war and Russia’s aggression in Ukraine have heavily impacted DLRR. Ukrainian Metinvest Group is unable to pay for the services provided by DLRR. The debt currently reaches EUR 8 229 550. Though the Ukrainian company has affirmed intentions to pay, it cannot because the Ukrainian government has decided to cease all monetary operations outside the country’s borders.
DLRR representatives note that the company has asked the Latvian prime minister, minister of economics, minister of finance, minister of welfare, minister of foreign affairs, minister of regional development, as well as Altum with a request to for aid in this emergency in the form of a short-term loan to ensure operational assets.
In its letter to officials, DLRR representatives provided an economically justified plan to explore new markets, but this requires time and aid from the state.
To pay for February and March, DLRR has borrowed money from the private sector. However, DLRR representatives stress this cannot go on.
According to the management of DLRR, the company needs a loan of current assets and the company is prepared to pay the money back once their Ukrainian partner has paid its debt.
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In their response, state institutions recommended DLRR to explore other markets. The Ministry of Economics, for example, provided DLRR with a list of websites of exhibitions for small and medium-sized businesses, which DLRR can attend as part of Investment and Development Agency of Latvia stands.
The ministry also explained is is proactive and the State Employment Agency’s Daugavpils branch has contacted DLRR human resources specialists to discuss the possible reduction of employees. DLRR employees will have the opportunity to learn new skills, the ministry explained.
DLRR does have to clearly separate investments and operations in Russia and Belarus, which have been defined as markets with increased risks since 2014, from operations and losses on the Ukrainian market, which has always been defined as an EU-friendly market.
DLLR management explained they don’t want to lay off employees or have them retrain for other jobs. The company’s representatives stress that DLRR is an important railway infrastructure company, especially in Daugavpils region, where more than 600 people are employed by this company. Currently, however, DLRR is forced to lay off a number of its employees in hopes of retaining the rest.
In 2020 DLRR operated with turnover of EUR 36.76 million, which is 0.6% less when compared to 2019. The company’s profits grew 6.4 times, reaching EUR 2.066 million. DLRR concern worked with turnover of EUR 39.7 million in 2020 and gained profits of EUR 2.4 million. No data is available for 2021.
The company was registered in 1991 with base capital of EUR 24 445 037. The company’s beneficial owner is Estonian businessman Oleg Osinovski.
Daugavpils Locomotive Repair Plant to terminate 240 employees
