06 January 2009 16:30 [Source: ICIS news]
HOUSTON (ICIS news)--Leading US fibreglass boat maker Brunswick said on Tuesday it would shut another manufacturing operation, dealing a fresh blow to demand for unsaturated polyester resin (UPR) and its feedstock maleic anhydride (MA).
"The global marine market remains in a severe downturn because of the weakening economies here and abroad and anxious consumer sentiment," Brunswick chairman and CEO Dustan McCoy said in a statement.
Brunswick is mothballing its Riverview facility in Tennessee, which makes Sea Ray boats. It said it would take additional actions aimed at reducing its work force, production and expenses.
The Riverview plant was one of three remaining Brunswick manufacturing facilities in the Knoxville area. Since 2006, Brunswick has sold, closed or mothballed another 14 plants in various locations.
Some of the Riverview production will be moved to the other Tennessee plants. In addition, production of certain models will be transferred to Brunswick's Palm Coast facility in Florida and a plant in Reynosa, Mexico.
The boat industry is one of the three main end users for MA, alongside the ailing housing and automobile industries.
The leisure boat segment has been the most vulnerable in the current recession because it is the most sensitive to discretionary spending. US sales were down by around 30% in 2008, according to an estimate from the National Marine Manufacturers Association.
Sliding UPR demand has undercut MA prices in recent months.
US MA contract prices settled at around 73.70 cents/lb ($1,625/tonne, €1,203/tonne) in December, down by 18% from a peak at around 89.70 cents/lb in September, according to data from global chemical market intelligence service ICIS pricing.
Market sources expect a further fall of 7 cents/lb in January contracts.
Regional MA producers include Huntsman, Lanxess, Marathon, and Flint Hills Resources (FHR) in the US; Bartek in Canada; and Idesa in Mexico.
($1 = €0.74)
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