25 November 2008 13:04 [Source: ICIS news]
PRAGUE (ICIS news)--Czech polyvinyl chloride (PVC) and caprolactam maker Spolana will reduce production by up to 50% from December and may have to cut wages and make lay-offs due to poor demand, the company said on Tuesday.
“The requirements of our trading partners, however, will be met entirely from the limited production or from stock,” said Spolana spokesman Jan Martinek.
“But by limiting production, Spolana will try to prevent the stockpiling of products made at high production costs incurred by an unusual increase in the price of PVC ethylene feedstock,” said Martinek.
“In the context of the rising impact of non-standard market fluctuations, Spolana decided to pay the penalty fee rather than purchase the full supply of ethylene from main ethylene supplier Unipetrol RPA,” added Martinek.
Since last week, Spolana has restricted most production units to 70% of capacity following its parent company’s instructions to take initial steps to counter falling demand.
Spolana said that it achieved a net profit of koruna (Kc) 75m (€2.95m, $3.8m) in the first nine months of this year, which amounted to 115% of its 2008 target.
($1 = Kc19.70/€1 = Kc25.40)
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