20 November 2008 17:21 [Source: ICIS news]
The company put plans on hold to expand its polypropylene (PP) capacity in Geel by 220,000 tonnes/year to 500,000 tonnes/year, and increase high density polyethylene (HDPE) output in Lillo by 200,000 tonnes/year to 630,000 tonnes/year.
“Due to escalation of capital expenditure costs combined with the uncertainties in market demand resulting from current economic conditions, the decision has been taken to delay both projects,” the company said.
INEOS said it was consulting with employee representatives on the postponement, and would seek every opportunity to re-deploy workers directly affected by the decision.
“Both projects remain strategic for the longer-term growth of our business,” the company added.
The new capacity was previously due to be in place by 2009.
Earlier in the week, INEOS announced that it was seeking covenant waivers from its banks until the end of the first quarter of 2009 following a collapse in petrochemical market demand.
The company said it expected €560m ($705m) in inventory losses for the fourth quarter and cut capital spending for 2009 to €250m from the €600m spent in 2008.
($1 = €0.79)
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