08 November 2009 19:20 [Source: ICIS news]
MEXICO CITY (ICIS news)--LyondellBasell’s bankruptcy during an economic recession has given the chemicals producer certain advantages in reworking many business deals, a company executive said on Sunday.
LyondellBasell senior vice president of sales and supply chain Dale Young said that under Chapter 11 bankruptcy protection, the company has the sole option for the rejection or assumption of present contracts.
“If you have to go there [bankruptcy protection], a weak economy gives you a tremendous opportunity on the procurement side,” he said on the sidelines of the 29th Latin American Petrochemical Annual Meeting (APLA).
Young said many companies are willing to rework their procurement contracts with LyondellBasell just to keep the business during the economic downturn.
When LyondellBasell declared bankruptcy in early January, the company had to make sure no companies stopped providing goods or services to its plants, Young said.
None of the company’s plants were down more than 1-2 days in the aftermath of the bankruptcy declaration, he said.
“The weak economy did [help] at that point because [service providers] didn’t want to lose the business,” he said.
Young said one of his jobs during the past year has been to assure customers that LyondellBasell is an ongoing operation in the midst of the bankruptcy process.
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Young said he assures customers that the company will emerge from bankruptcy next year as a stronger operation. He said he also explains that the bankruptcy was the result of the company being saddled with well over $20bn (€13bn) in debt and was not the result of market issues.
The company’s new chief executive, James Gallogly, has made cost controls a priority, Young added.
LyondellBasell currently has more than 13,000 employees, compared with roughly 16,000 at the start of the bankruptcy process, he said.
The 29th Latin American Petrochemical Annual Meeting continues through Tuesday.
($1 = €0.67)
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