UpdatePerstorp stops Sweden oxos, cuts jobs

21 November 2008 13:03  [Source: ICIS news]

(Releads and updates with background information in paragraphs 9-15)

LONDON (ICIS news)--Swedish oxo-alcohols producer Perstorp will stop production at its Stenungsund-based facility for around one month and the company will cut 105 jobs in Sweden due to weak demand and a lack of raw material supply, a company source said on Friday.

The Swedish producer will stop production from 6 December 2008 to 5 January 2009.

Perstorp will bring production to a halt at its entire oxo-alcohols facility, which has capacities of 100,000 tonnes/year of n-butanol, 120,000 tonnes/year of 2-ethylhexanol (2-EH) plant and 65,000 tonnes/year of dioctyl phthalate (DOP).

The company's 35,000 tonne/year phthalic anhydride plant in Nol, near Stenungsund, will also close.

The current lack of demand, which had already seen the company cut production by up to 30%, was the primary reason for the closure. As a result, Perstorp was keen to lower inventories ahead of the year-end.

Moreover, a cracker located close by was reportedly closing from 14 December for one month, effectively removing the oxo-alcohol facilities’ raw material source. This cracker is run by Borealis but its closure was not confirmed by a Borealis company source.

Perstorp said its regular oxo-alcohol customers would continue to be supplied from inventories during the period.

The company’s biodiesel plant at the site will continue to run at normal rates.

Perstorp said earlier this week that it would cut 105 jobs in Sweden as a result of the lack orders.

“Demand has fallen rapidly in recent months and nothing points to a quick improvement in the order intake,” said CEO Bo Dankis. "We have probably not hit the bottom of the recession yet."

He said that especially affected were the automotive and construction industries.

“First we will delay planned investments and activities and slow down the pace of production. This unfortunately won’t be enough and we also need to lay off 105 employees,” Dankis added.

“Our job now is to ensure that Perstorp remains a profitable company and that we’re prepared to kick-start our growth strategy as soon as the economic climate improves,” he said. 

Of the 105 employees, 68 work in Perstorp and Helsingborg and 37 in Stenungsund and Nol. Perstorp has around 1,000 employees in Sweden.  

The Perstorp cuts came as other chemicals producers have taken similar action, including production stops for 80 of BASF’s plants worldwide, Rhodia’s decision to close its polyamide plant at Valence and Arkema’s closure of 12 global plants.

Hilde Ovrebekk contributed to this article
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By: Carl Roache
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