Mexico's Alfa reports a 36% jump in Q4 profits to $182m

01 February 2011 23:45  [Source: ICIS news]

MEXICO CITY (ICIS)--Mexico's Alfa reported $182m (€133m) in profits in the fourth quarter – a 36% boost over the same period in 2009 – as the purchase of Phoenix-based BAR-S Foods began to impact the company's bottom line, the industrial conglomerate said on Tuesday.

The fourth-quarter results for Alpek, Alfa's petrochemical division, were not as strong because of higher basic raw material prices. Sales were up 19% to $1.248bn over the same period in 2009, and EBITDA rose to $126m, a 26% rise.

Alpek's polyester and polyester value-chain products saw 5% growth in the fourth quarter.

High demand for polyester in China and other Asian markets as a result of a shortage of cotton has lowered the world supply of purified terephthalic acid (PTA), and this, combined with paraxylene (PX) production problems around the world, has put a strain Alpek's polyester chain.

Raw material costs drove quarterly prices up about 14.3% in 2010 over the fourth quarter of 2009.

The company also reported that Clear Path Recycling, the company's polyethylene terephthalate (PET) recycling joint venture with Shaw Industries, started operations. The first stage has the capacity to recycle over 72,000 tonnes of PET bottles per year.

The company's specialty chemical and plastics segment, which produces expandable polystyrene (EPS), polypropylene (PP), caprolactam and others, was affected by seasonal decline in demand in the 2010 fourth quarter. Sales volumes edged up 3% year on year, assisted by higher PP, EPS and polyurethane sales.

Alpek's natural gas project Newpek reported solid progress, closing the year with 21 wells in operation at the Eagle Ford Shale formation, whereas only five were in operation at the end of the third quarter of 2010.

($1 = €0.73)

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By: James Young

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