US Albemarle to keep polymer plants idle – CEO

27 January 2009 20:03  [Source: ICIS news]

TORONTO (ICIS news)--US chemicals producer Albemarle expects to keep most of its polymer production plants in the US and overseas idle in the first quarter, CEO Mark Rohr said on Tuesday.

“We do not plan to restart these units until we have firm orders in hand,” Rohr said during the company’s fourth-quarter analysts’ conference call.

The company idled virtually all its polymer plants as demand dropped amid a fourth-quarter economic decline that was as “far greater than we ever expected,” Rohr said.

The near-term goal for Albemarle’s polymer business was to bring down inventories by as much as possible, he said.

“I have never seen a higher degree of uncertainty about where these markets are going,” Rohr said.

“It’s really very difficult to deal in a market where the uncertainty not only of our customers but also of our customers’ customers is so high.”

In China, Albemarle’s was not likely to restart its plants before the second quarter.

Markets in China and other countries in the region had been hit by the decline in demand for consumer electronics products, he said.

“There are rumblings out there that post-Chinese New Year volumes are going to start picking back up, but we are taking that with a grain of salt,” he added.

Albemarle had put an anti-oxidant expansion in China on hold, Rohr added. Originally, the project was expected to start this summer.

But Albermarle executives on the call said the company remained financially strong and would seek out acquisition opportunities amid the downturn.

Albemarle was keen on niche acquisitions that could be paid for in cash and would close quickly, they said, but did not disclose specific targets.

Albemarle’s cash position at the end of  2008 was $253m (€192m) and the company had no significant debt repayment obligation until 2013, the executives said.

Apart from acquisitions, Albemarle would use its cash to pay dividends and for “opportunistic” share repurchases, the executives said.

The US producer reported a fourth-quarter net profit fall of 77.6% to $13.1m (€9.9m) as the automobile and construction sector slump and the downturn in consumer electronics hit its additives business.

Albemarle’s shares were down 6.7% to $20.99 in early Tuesday afternoon trading in New York.

($1 = €0.76)

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By: Stefan Baumgarten
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