Dutch factory closure hits Brunner Mond
THE closure of an under-performing plant in The Netherlands pushed North West chemicals giant Brunner Mond into the red last year.
Chief executive John Kerrigan told TheBusinessDesk that the Delfzijl site had been losing money for the last six years and had been shut down last autumn at a cost of £26m.
As a result the Northwich-based company, owned by the Indian conglomerate Tata Group, posted a loss of £14m for 2009 on turnover of £135m, up from £126.5m in 2008.
Mr Kerrigan said: “The Dutch plant was relatively small in term of our business. We tried hard to improve its performance, but it was crippled by the rise in costs of energy and raw materials.
“Despite investing in a new sodium bicarbonate plant continued heavy losses were forecast we decided that the plant was unsustainable.”
He said last year’s rises in energy prices has been a ‘killer’ for the plant. To mitigate its future exposure, the company is planning to invest £300m in a green power plant on its Cheshire site. Plans have been submitted to the Department for the Environment and Climate Change.
On an operating level, stripping out the £26m write-off, Mr Kerrigan said Brunner Mond had “done OK” with operating profits at rising from 10.8% of turnover to 11.5%.
Brunner Mond manufactures soda ash – a key substance in the glass making process, and also sodium bicarbonate, which is used in food production and is also an ingredient in over-the-counter medicines.
Mr Kerrigan said it was until later in 2009 that Brunner Mond started to feel the effects of the downturn in the automotive and construction sectors and there remains uncertainty in both markets.
He revealed the company was in consultations with unions to trim the 500-strong workforce by between 20 to 25 jobs.
“We’re doing a little bit of restructuring and just trying to stay ahead of the curve. I think may of the post affected will go with natural wastage. We are just keeping a tight hand with regard to people costs and maintain our ability to keep investing in the business.”
