27 March 2013 17:15 [Source: ICIS news]
(recasts article clarifying the insolvency regards KEM ONE's upstream vinyls business KEM ONE SAS)
LONDON (ICIS)--The Mediterranean caustic soda market could become tight as a result of French producer KEM ONE placing its upstream vinyls business KEM ONE SAS into receivership, sources said on Wednesday.
The company has been put into receivership at the request of its chairman.
"In view of the financial position of KEM ONE SAS, Gary Klesch, chairman and shareholder of KEM ONE, filed for a state of insolvency for the company with the Commercial Court of Lyon," a company statement said.
"Following the ruling of the Commercial Court of Lyon, which formally opened the proceedings, the KEM ONE management team is determined to find sustainable solutions with its historical stakeholders, Arkema and Total, that will allow the business to continue to operate," it said.
On Wednesday 27 March, the court appointed an official receiver, who will be in charge of the administration of the company. The company will continue to operate as normal during these proceedings, the statement added.
KEM ONE's situation could mean that caustic soda supply to the Mediterranean will be cut and other producers will not be able to supply the entire market, an Egyptian producer said.
However, with a steady flow of liquid caustic soda imports from the US and the Middle East, the tightness could be eased, the source added.
So far this year, the US has exported more than 30,000 dmt of liquid caustic soda to the Mediterranean, and the latest shipment was 20,000 dmt on 15 March.
Iran and Saudi Arabia also regularly export to Europe, and the KEM ONE announcement may result in more volumes from those countries.
($1 = €0.78)
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