Contemplating the possibility of closing its French subsidiary, the Saguenay company STAS reported being extremely affected by the economic sanctions imposed on Russia.
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When the conflict began, the president of STAS, Louis Bouchard, would never have believed that the finances of his company would be so severely affected by the war, explained the latter to TVA.
“We didn’t see anything coming. In the space of 48 hours, we went from business continuity to a disaster scenario very, very quickly.”
Sanctions would indirectly affect STAS. In fact, one of its major clients, the Russian aluminum producer Rusal, to which STAS has been supplying equipment for 15 years, no longer has access to the SWIFT transaction system enabling it to pay STAS for work already carried out.
“We have a loss of revenue from our turnover of around $10 million. And we have unpaid invoices of around $2.5 million, explained Louis Bouchard. So it’s a direct impact on our cash flow and our ability to carry out projects. Rusal has cash, money, but they are unable to transfer to us due to sanctions on the banking system and the SWIFT system. We are also no longer able to ship the equipment. How do we carry out our mandates? How do we get paid for the work we have done?” asked Mr. Bouchard.
With such losses, the closure of the French subsidiary of STAS is not ruled out by the company dedicated to the supply of specialized equipment for the aluminum industry. “We are in the process of restructuring it financially”, said Mr. Bouchard.
Jobs in Canada are also not immune.
“It might go so far, reduce work teams. The issue is that the stoppage came excessively suddenly. And this sudden stop there creates a hollow in the production chain, ”he adds.
Assistance from Ottawa is therefore desired.
“It’s time to put a little pressure on the federal government, believes the Bloc member from Jonquière, Mario Simard. What needs to be done immediately is to put in place a liquidity access program to allow STAS to find new customers, until the dispute ends. There is still $200 million of counter-tariffs on aluminum that the government has not redirected to the aluminum sector. Is this a possible solution? The meetings we had ended in wishful thinking.”
Louis Bouchard found it distressing that the federal government is closing the door. He would like it to act as in free trade agreements by adopting compensatory measures.
“The government is very closed even to wanting to sit down. What might he put in place to support companies like STAS? The Canadian government has its eyes set on sanctioning and hurting Russia. He has his eyes set on helping Ukrainians and their people and all that. But he has little listening for the impacts that are here in Canada.
Would another solution go through Rio Tinto, for which STAS has been an equipment supplier for more than 30 years? A kind of solidarity in the aluminum sector?
“We believe that Rio Tinto might support us and help us in this process in one way or another,” said Louis Bouchard.
STAS assesses having a game of three or four months to avoid a reorganization, and may be considering layoffs.
