T

he labor union of publicly listed cement producer Holcim Indonesia has demanded that the company hold further discussions on its plan to lay off hundreds of workers amid a weak company financial performance and dipping overall domestic cement sales.

Holcim announced on Friday last week that it planned to lay off workers aged below 45, with a number of workers having yet to be notified of such a plan.

That was after Holcim canceled its deal with its labor union in late April that agreed on a mutual voluntary separation program deemed beneficial for both parties. Holcim then proposed another plan '€” early retirement for workers aged between 53 and 55 years of age '€” which had been approved by the union but was not implemented.

'€œThe firm should have had to invite the labor union for discussion so a decision could be made together. However, these steps were not carried out,'€ said Holcim Labor Union chairman Bakhtiar Rusli on Sunday.

The union also protested unfavorable measures, such as the revocation of worker identity cards without prior notification, Bakhtiar further said.

The corporate restructuring will affect around 350 Holcim employees out of more than 2,600 employees, according to the labor union.

The planned lay off came up after Holcim Indonesia, the local unit of the Zurich-based Holcim Ltd., experienced a 89.7 percent drop in net profit to Rp 33 billion (US$2.51 million) in the first quarter of this year from last year driven by a high increase in financial costs. This poor result came on the heels of poor performance throughout 2014.

The company also saw a 5 percent drop in quarterly revenues to Rp 2.25 trillion as it booked a 7 percent decline in cement sales by volume in line with the market trend.

Domestic cement sales dipped 4 percent to 13.9 million tons in the January-March period as many construction projects have yet to be realized. Increased competition by the government'€™s instruction to lower the price of cement by Rp 3,000 for state-owned cement makers also affected the whole industry.

But the labor union argued the firm was experiencing normal conditions and that there was no financial evidence of bankruptcy from public accountants.

In response to the union'€™s demand, Holcim claimed that it had offered selected companies an early retirement package and limited separation package as part of the company'€™s reconfiguration process.

'€œThese arrangements have been finalized after extensive internal engagements with various levels of our employees, including unions,'€ said Holcim Indonesia CEO and president director Gary Schutz in a statement.

The firm also considered its separation offers in compliance with prevailing regulations, including the fulfillment of all rights of affected employees and covered outplacement support plan for workers wishing to carry out such arrangements.

Shares in Holcim Indonesia, which is listed on the Indonesia Stock Exchange (IDX) under the code SMCB, traded at Rp 1,575 on Monday, up 3.28 percent from the previous day. The stocks have plunged almost 28 percent so far this year, worse than the broader benchmark Jakarta Composite Index'€™s (JCI) 1 percent drop.