Razgulai Cut 2,200 Jobs and Wages 15%

Grain and sugar producer Razgulyai Group said Friday that it cut 2,200 jobs and wages for its remaining workers as much as 15 percent as banks tighten credit, prices decline and customers fail to pay for deliveries.

Sales fell 15 percent in October from the previous month as overdue payments increased, chairman Igor Potapenko said on a conference call. The job losses represent about 12 percent of the company's 18,000 workforce, and wages will be cut by 5 percent to 15 percent, he said.

Razgulyai is "seriously concerned" after accounts receivable, including payments owed, rose to 6 billion rubles ($219 million), Potapenko said. The company aims to refinance a loan from VTB of the same amount in the first half of 2009, he said.

The company has about $1 billion of debt and plans to repay part of this by reducing trading positions now equivalent to 800,000 tons of grain and 200,000 tons of sugar, he added.