05 May 2009 13:23 [Source: ICIS news]
By Mark Watts
LONDON (ICIS news)--Borealis on Tuesday said it was considering further cost-cutting measures to ride out the global downturn, with the economic situation showing little sign of recovering.
Giving a more conservative economic outlook than much of the chemicals sector, Borealis CEO Mark Garrett warned that real demand might not recover before the end of 2010.
“We don’t see any signs that the global economy is recovering. We see that it has stabilised…and expect it to bounce along on the bottom,” Garrett told ICIS news.
The company was considering a broad range of measures to reduce costs, which Garrett said could include temporary shutdowns, short-time working and job cuts.
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“Temporary shutdowns are absolutely possible… and we have a range of options around short-time working,” Garrett said.
“Our aim is to try and get as many people as possible through the recession as we’re convinced we’ll need them when the economy picks up. We don’t have any plans for mass lay-offs,” he added.
Borealis reported a first-quarter net loss of €56m ($75m), down from a profit of €130m in the same period last year.
The results were negatively impacted by the high cost inventory produced in the fourth quarter of 2008, which was largely cleared in the first quarter of 2009, the company said in its quarterly announcement.The company was on schedule to complete its 350,000 tonne/year low density polyethylene (LDPE) plant in
Garrett said the demand situation would not delay the start up of the plant as it was part of its scrap-and-build programme to replace existing capacity.
The start up of the large-scale Borouge petrochemicals expansions in
“The recession will just accelerate the process,” Garrett said.
“These big plants in the
Garrett said the main restructuring would happen to non-integrated smaller plants that don’t have the economies of scale.
“The recession will accelerate the process of those plants being closed and taken out of the market,” he added.
He stressed that, as many producers starting up in the Middle East also have sites in Europe and
“We’re seeing a real effort by the industry to balance supply and demand and not destroy the industry [in North America and
($1 = €0.75)
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