Canada chems remain profitable despite sharp sales decline

11 December 2009 15:25  [Source: ICIS news]

Canada chems maintain profitsTORONTO (ICIS news)--Canada’s chemical producers managed to maintain operating profits this year despite a sharp 35% decline in sales, mainly because of low natural gas prices, an industry group said on Friday.

Canadian sales of basic chemicals and resins fell to Canadian dollar (C$) 16.6bn ($15.8bn), down 35% from 2008, in the wake of the global recession, the Canadian Chemical Producers Association said, citing the findings of its latest industry survey.

However, chemical industry operating profits before interest, taxes and special write-offs were C$1.4bn, almost unchanged from 2008, because of the lower natural gas prices, the group said.

Natural gas, the main feedstock for the industry, was down from C$13/m Btu in 2008 to C$4-5/m Btu in 2009.

This cost advantage meant that Canadian-based chemical producers could keep their plants operating while many competitors in other parts of the world had to idle theirs.

However, as demonstrated by the sharp year-over-year decline in sales, Canada’s chemical producers were not immune to the recession, the group said.

Chemical sales to Canadian customers fell 47% while export sales fell 31%.

Sales to the US market, by far the most important market for Canada’s chemical industry, were down 29%.

The Ottawa-based industry group said the sales decline was primarily due to the slump in sectors such as autos, housing, as well as pulp and paper.

Meanwhile, Canada's chemical industry employment fell by 17% to 15,800.

Major chemical firms with production in Canada include NOVA Chemicals, Dow Chemical, Shell, MEGlobal, DuPont Canada, LANXESS and Invista, among others.

($1 = C$1.05)

Read Paul Hodges’ Chemicals and the Economy Blog
To discuss issues facing the chemical industry go to ICIS connect

ICIS Free Trials Sign Up

By: Stefan Baumgarten
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index