Plants of the INA oil company at the refinery in the city of Sisak will be closed, the company's newly appointed chief executive, Sandor Fasimon, said on Thursday in an interview.

“My view, considering the company’s business results, is that Sisak (refinery) is not making money. That means that it needs a transformation. What will most likely happen is that the refinery will be in one location, while the other one will be used for logistics and other industrial purposes,” Fasimon, the new chief executive of the Hungarian energy group MOL which owns a 49 percent stake in Croatia’s oil company INA, said in an interview to RTL television in Budapest.

Fasimon was appointed to the top post at INA last week, at a time when the Croatian government, which owns 45 percent of the company, is looking into buying back MOL’s share. Earlier this month, the government has selected a consortium led by Morgan Stanley to advise in the buyback process and determine the value of the transaction. The company’s market capitalisation is around 33 billion kuna (€4.45 billion).

Fasimon said refinery workers would be taken care of, and added that INA must continue its successful business performance. He said that his task in Croatia is also to raise the company’s technological and production levels.

He recalled that Hungary once had five refineries. “Today we only have one, but we have not abandoned any of the previous locations. We launched new kinds of operations and production there, such as bitumen, petrochemicals, and logistics,” Fasimon said.

Fasimon said that, by looking at business performance figures, he would prefer to concentrate refinery operations in one location, possibly at another refinery owned by INA in the the port city of Rijeka.

“It would most likely be in Rijeka, but I can’t say that definitively. Considering all the economic factors, that should be the scenario. We should certainly shift the bulk of our investment into that. But that does not mean that we will completely abandon the other location (at Sisak), we will retain the industry there, and we’ll see what can we produce there.”

Asked about possible lay-offs at the Sisak refinery, which currently employs some 600 workers, Fasimon said the first order of business is to decide what the role of the plant will be in the future, before any estimates on how many people are needed for that.

“It depends on the need for workers, we will see what happens. INA always takes care of its workers, so none of them will end up in the streets. In the worst case scenario, if there are lay-offs, the severances will be fair, there’s no doubt about that. We want to continue doing this business, and use the full potential that INA has. I know that it’s there, I know my colleagues, and I know how professional they are,” Fasimon said.

Hungary’s MOL is also interested in buying a stake in the ailing Croatian state-owned fertiliser producer Petrokemija, along with other strategic partners. Petrokemija employs 1,700 people and had posted a 146.8 million kuna (€19.8 million) loss in 2017.

“It is no secret that we are in negotiations about that. If Petrokemija can be managed on market-based principles, free of the problems it had in the past, then we would certainly be interested in such a cooperation, in the form of a new business line,” Fasimon said.

Fasimon will formally take up his position at INA in mid-June, when he will arrive in Zagreb. He will replace Zoltan Aldott, who held the post since April 2010.

(€1 = 7.41 kuna)

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