Croda to permanently shut down UK tallow fatty acid plant

02 September 2009 14:42  [Source: ICIS news]

LONDON (ICIS news)--Croda Europe is planning to permanently shut down its tallow fatty acid plant in Merseyside, UK, at the end of September, a company source said on Wednesday.

The source said the plant was being shut for “economical” reasons, but declined to divulge further details.

The plant produces tallow-based stearic and oleic acid and has a capacity of 80,000-90,000 tonnes/year. In recent years output had been limited to 30,000-50,000 tonnes/year, approximately 8-9% of the European market, according to a market source.

A source at another major European oleochemical producer said the effects of the closure on fatty acid markets would primarily be felt in the UK.

Croda is the only producer of fatty acids in the UK and so enjoys a competitive advantage over its European rivals. Its prices do not include the cost of freight, meaning it can successfully exclude non-UK producers, the source said.

The lost volume would have an indirect effect on the European market as UK consumers would be forced to import material, the source said, adding that “the effect in Europe will be less pronounced, because it will be more spread out”.

Croda was not immediately available to comment.

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