Brunner Mond chiefs confident despite incurring losses
CHESHIRE-based chemicals company Brunner Mond declared a pre-tax loss of £4.2m in the year to March 31 (2009: £9.3m loss) on reduced sales of £241.8m (£272m).
However, the company, which has been owned by Indian conglomerate Tata since a £93m buyout in 2006, pointed to exceptional costs of £16.4m in explaining the loss.
These included losses incurred against the closure in October 2009 of the company’s Dutch operations at Delfzijl, where it had previously opened a new sodium bicarbonate plant five years ago at a cost of almost €15m.
Despite this, the firm’s directors argued in notes accompanying the accounts that the business was “well-placed to take advantage of the opportunities that are expected to arise in the coming year”.
The company, which was a forerunner to the ICI business, initially began trading from its Northwich site in 1874. It produces soda ash, sodium bicarbonate, calcium chloride and other alkaline substances used by chemical firms. It employs around 1,400 people at sites in Northwich, Magadi in Kenya and at Durban in South Africa.
During the year, the firm reduced the level of its net debts to £95.6m (£116.5m) – £57.1m of which is due for renewal in June. Directors said that prepared forecasts indicated levels of cash generation which “should ensure that replacement financing will be forthcoming on terms which are acceptable to the group”.
Last week, Tata Chemicals announced that it was to buy the British Salt business from private equity firm LDC in a deal worth £93m. Tata plans to incorporate British Salt within the Brunner Mond business.
Brunner Mond’s managing director Michael Ashcroft (who was appointed in May) said the deal would allow Brunner Mond “to leverage its manufacturing and processing expertise to accelerate the growth of British Salt, which has already achieved an enviable reputation in several fast-growing and non-cyclical markets”.
