07 January 2014 22:28 [Source: ICIS news]
HOUSTON (ICIS)--A Schulman’s consolidated plant in Brazil is operational amid hopes that the South American country’s economy begins to grow again at a substantial rate, executives with the US-based compounder said on Tuesday.
“We are in the process of finalising our restructuring actions, so when we do experience any uptick in the local economy, our footprint rationalisation will allow us to cost effectively capitalise on our opportunities,” said Bernard Rzepka, chief operating officer and executive vice president of A Schulman.
“We still expect to see the majority of our estimated $1.4m [€1.0m] of synergies starting in the second half of this fiscal year,” added Rzepka, who made his comments during a fiscal Q1 2014 earnings conference call.
A Schulman began consolidating its two Brazilian facilities into one during 2013.
Demand for A Schulman’s products in Brazil have been sluggish along with the country’s economy, which shrank by 0.50% in Q3 2013, according to the Brazilian Statistics Institute (IBGE).
Recently, economists have forecast Brazil’s economy to grow by 2.28% for 2013, which would be the third year of slow growth and a far cry from the days of 7.5% GDP growth in 2010.
A Schulman CEO and president Joseph Gingo said the economic softness seems to be country-related and not market-related.
“It's across the board,” Gingo said. “I mean, we're seeing it in our engineered plastics business, which does reflect into the automobile and electronics. We're seeing it in our masterbatch business, and we're actually seeing it even in our roto-compounding business.”
Conversely, A Schulman is seeing strong demand in Mexico, which should continue into at least the first part of this year, Rzepka said.
($1 = €0.73)
|ICIS news FREE TRIAL|
|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|
Asian Chemical Connections