10 December 2008 23:01 [Source: ICIS news]
HOUSTON (ICIS news)--US carbon black producer Cabot plans to cut production by up to 40% as it expects large sales decreases during the current quarter, the company said on Wednesday.
Cabot began the cuts in October, when the first-quarter of fiscal year 2009 started, the company said. The reductions, combined with other adjustments, should save the company more than $80m/year (€62m) by its fiscal year of 2010.
For the current fiscal year, Cabot plans to reduce capital spending by $50m, the company said.
The reductions come as Cabot expects sales volumes to drop by 20-30% year over year during the current quarter, the company said. The sales reductions include Cabot's business lines for rubber blacks, performance products and fumed metal oxides.
Cabot attributed the sales declines to global weakness in the tyre, automotive and construction industries. Inventory reduction is exacerbating the slowdown.
"It is difficult to foresee how the remainder of the fiscal year will develop," according to a statement by Patrick Prevost, CEO. "But we expect that the lower first-quarter volumes will have a considerable impact on the full year, and we are preparing for an extended slowdown."
($1 = €0.77)
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