MercoPress. South Atlantic News Agency

Lack of Argentine gas forces Methanex redundancies

Methanex Punta Arenas

Methanex in the extreme south of Chile announced this week it will have to cut its work force in approximately 15% because of the insufficient supply of Argentine natural gas.

The Canadian company which is located a few miles from Punta Arenas in the Magallanes Region transforms natural gas into methanol and is one of the world's leading producers. The announcement was made in Punta Arenas by Paul Schiodtz, Methanex Senior Vicepresident for Latinamerica, next to Roger Neumann head of Manufacturing in Chile and other managers of the company. The "inevitable restructuring" means that 39 jobs will have to go. Methanex's four modules plant employs 230 and another 30, mostly administrative staff work in Santiago. Although the company did not give details of the redundancies, apparently 34 jobs will be lost in Punta Arenas and the other 5 in Santiago. "Having gone nine months without natural gas provision from our suppliers in Argentina and having exhausted all possible instances for the resumption of supply, we have been forced to implement a reorganization of our operation in Chile. Consequently 39 people, which represent 15% of our professional staff in Chile have terminated their work relation with Methanex Chile", announced Paul Schiodtz. "On this day the inevitable restructuring" has been communicated to all the personnel of Methanex Chile by the management team of the company added Schiodtz. The situation is particularly painful for Magallanes region and Punta Arenas since Methanex in the last ten years had become the leading industry with greatest impact on economic activity, but for over a year, because of lack of Argentine natural gas has been operating at 30% capacity. "Since June 2007 Methanex has not been provided with natural gas by its Argentine suppliers and has been operating at 30% capacity". Magallanes region activity dropped on average 11.5% in the last four quarters because of the Methanex situation which also has meant a fiscal loss of 53 million US dollars plus levies charged by Chile's government owned oil company Enap for the use of the pipeline that should have transported gas from Argentina to Magallanes. "All those who are leaving the company have agreed to a benefits plan specially designed" which contemplates a period of transition to help workers and families with retraining, labor transition and family arrangements, indicated Schiodtz. However Schiodtz underlined that the restructuring is part of a long term plan to progressively substitute Argentine gas with Chilean gas. "We trust in the exploration and development process undertaken by the Chilean government in the area to ensure a future reliable supply of gas. We are hopeful that the company will soon retake its volume of production helping the economic development of Magallanes Region", said Schiodtz.