BASF cuts North America EPS capacity by 20% on market

29 March 2002 20:57  [Source: ICIS news]

HOUSTON (CNI)--BASF Corporation is reducing production capacity for expandable polystyrene (EPS) in North America by 20% or 22 700 tonne/year citing market conditions.

Mount Olive, New Jersey-based BASF said it is taking reactors out of commission at the company's manufacturing plant in South Brunswick, New Jersey immediately.

The company did not return telephone calls seeking additional information.

Kevin McQuade, BASF business director, said in a statement that the last two years have been "extremely challenging" for the EPS industry in North America, as block and shape resin demand has significantly declined."

He added: "Our action is intended to bring production capacity for our Styropor EPS products in balance with market demand. Factors influencing the decline in demand and profitability have been the economic slowdown in the US, significant de-stocking of moulder inventories and continued migration of the OEM [original equipment manufacturer] packaging business to Mexico."

He added that recent increases in raw material prices have eroded margins to "unacceptable levels."

McQuade added: "Past measures have not offset the impact on our cost structures, making this reduction in capacity necessary."

By: Mike Sheridan
+1 713 525 2653

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