19 December 2008 10:22 [Source: ICIS news]
LONDON (ICIS news)--LANXESS has postponed several projects due to a global decline in demand for its products, the German specialty chemicals producer said on Friday.
The company’s 100,000 tonne/year butyl rubber project in Singapore was now expected to start up in 2012, put back from late 2010, with groundbreaking delayed from January 2009 to the following autumn.
Plans for capacity expansions at LANXESS plants in
“We have decided to put off some investment projects given the decline in demand for chemical products we are seeing throughout the world. In addition, this will ensure the necessary financial flexibility for the difficult fiscal year 2009,” said LANXESS chairman Axel Heitmann.
Despite the decline in demand over the fourth quarter, the company maintained its full year EBITDA (earnings before interest, tax, depreciation and amortisation) guidance of €710m – €730m ($496m – $510m), saying the figure would be influenced by the value of inventories at the end of the year.
LANXESS expects demand to be “very weak” in the first quarter of 2009 and has either cut or halted production at the majority of plants at its core German sites, affecting 1,400 employees.
Demand for the company’s products has been hit by weak downstream demand from the automotive, construction and general chemicals markets as European economies slide into recession.
“If demand stays at its current low level, we will implement further measures globally,” said Heitmann.
($1 = €0.70)
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