08 March 1999 00:00 [Source: ICB]
Floating a business like Acordis, which is struggling against a tide of negative influences, is not easy, but Akzo Nobel looks set to achieve this with the demerger in the second half of 1999.
All sectors of the fibres market are under pressure. Low prices as a result of global overcapacity, weak Asian economies and high fibre and textile imports into Europe have resulted in industrial fibre sales dropping 6%, textile fibre sales are down 9%, and aramid is down 11% if the Courtaulds acquisition is excluded. Income for 1998 was up and margins increased - but to a still unacceptable 3.3%, boosted by cost saving moves in industrial and textile fibres. However, the Courtaulds business went into losses in the final quarter because of weakness in acrylics and acetate tow on top of ongoing losses in Tencel. The mothballing of the Mobile, Alabama, Tencel plant indicates just how unsuccessful Tencel has been in the weak climate. Membrana's results were adversely affected by costs of introducing new products.
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