US A Schulman concerned about customer defaults - CEO

19 October 2009 20:54  [Source: ICIS news]

HOUSTON (ICIS news)--Plastics compounder and distributor A Schulman said on Monday it remained concerned about possible business failures among its customers as recent signs of economic recovery could prove misleading.

“We remain concerned about the economic viability of customers going forward, particularly international ones,” chief executive Joseph Gingo said during a conference call with investors.

Gingo said his company would likely maintain lower resin inventories going forward because of questions about the sustainability of recent demand.

“We’re keeping it tight, we’re really stressing our manufacturing plants right now,” he said. “We haven’t put back all our lines, we haven’t added third shifts, we’re primarily handling things with overtime.”

The company said the results of its fiscal fourth quarter, which ended on 31 August, demonstrated operational improvements that were expected to continue into 2010.

“Our capacity is now better aligned with market demand,” Gingo said. “Further restructuring could be required as we further optimise our manufacturing footprint.”

A Schulman officials said they would be aggressive, but selective, in pursuing acquisitions during fiscal 2010.

These could include expanding the company’s masterbatch business in the US or making technology plays in aerospace or medical engineering plastics, A Schulman said.

($1 = €0.67)

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By: David Barry
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