US Cereplast tightens customer credit amid Europe worries

27 December 2011 15:23  [Source: ICIS news]

HOUSTON (ICIS)--Cereplast has tightened customer credit terms amid a worsening economic outlook in Europe, the US-based renewable plastics firm said on Tuesday.

However, Cereplast remains confident that it will be able to collect all outstanding receivables, it said in a statement.

As part of its measures, Cereplast halted shipments to customers with outstanding invoices over 150 days, it said.

Furthermore, Cereplast has implemented “more rigorous credit practices”, including requiring advance payments, letters of credit or bank guarantees.

Also, Cereplast CEO Frederic Scheer met senior-level executives of all customers with overdue invoices over the last two months.

Cereplast said two European customers accounted for $13.7m (€10.5m), or 65%, of the company’s outstanding receivables as of 30 September 2011.

“While Europe's macroeconomic conditions can be blamed for much of what we experienced, we had to adjust our payment terms to customers which will reduce the risk of outstanding balances becoming extended past our normal acceptable period,” Scheer said.

In related news on Tuesday, Switzerland-based refiner Petroplus reported that lenders have frozen about $1bn in uncommitted credit lines under a revolving credit facility.

In the US, economists at trade group American Chemistry Council have repeatedly warned that the situation in the eurozone poses a big risk for the US economic recovery.

($1 = €0.77)

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