17 March 2003 00:00 [Source: ICB]Rationalisation looks certain for the European citric acid industry, which is in turmoil. Prices have hit all-time lows and the industry is losing money, said a major supplier. 'Smaller plants that do not have economies of scale will not survive.'
Low Chinese prices have undermined European numbers which ranged from E0.68-1.00/ kg in 2002 and pr
Demand has slowed over the past two years from traditional growth of 3-5%/year. Chinese suppliers have been exporting greater volumes to Europe and taking market share from domestic producers. 'European producers will have to accept there is competition from China and get into a cost competitive situation,' according to one leading producer. 'Cost control is a major issue, Chinese suppliers will not go away.'
The closure of Aktiva's plant in the Czech Republic could well signal the beginning of a wave of consolidation. The 20 000 tonne/year plant is now idle although it is unclear whether the stoppage is permanent.
In addition, ADM's restructuring plan has prompted a strike in Ringaskiddy, Ireland. Production was halted on 7 March, following the failure of one of the three unions that represent workers at the facility to accept the company's latest proposal. ADM said the 'restructuring is necessary in a very difficult business environment'.
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