Croda profits in line as it closes factory
NATURAL chemicals producer Croda International said today that it expects first quarter profits to hit targets but it is to shut down its Merseyside plant with the loss of up to 115 jobs.
The Goole-based firm, which supplies some of the world’s best known skincare and cosmetics companies such as L’Oreal, Chanel, Clarins, Estee Lauder and Procter & Gamble, said the move is part of its strategy to reduce its exposure to basic commodity sectors as it focuses on speciality markets.
Chairman Martin Flower will tell shareholders at the group’s annual general meeting today that despite the difficult economic climate, its core consumer care business produced record revenues during the first quarter of this year, up 26.6% to £133.7m with operating profit up 37% to £28.9m.
He said that there was weaker demand for industrial speciality chemicals with sales down 19%.
Mr Flower said: “We expect the weakness in commodity and industrial markets to continue over the coming months but also anticipate continued sales growth in consumer care and this, allied to ongoing cost savings and favourable raw material pricing in some sectors, gives us continued confidence that we will make further progress in 2009.”
Group pre-tax profits in the first quarter for continuing operations was £21.7m which was an improvement on the fourth quarter but lower than the same period last year.
Net debt stood at £395.8m at the end of March, in line with expectations, with positive currency translation outweighing unfavourable tax and interest payment phasing.
The Bromborough plant on Merseyside was part of the Uniqema operation that Croda acquired in 2006 and manufactures commodity and industrial speciality chemicals.
Croda said it will move production of “key specialities” to other sites.
The plant had a turnover of £45.3m and operating profit of £2.1m last year but Croda said this was “flattered” by favourable glycerine pricing and the site made a loss in the final quarter of 2008 which has worsened into 2009.
The move will see an exceptional asset write off of around £30m and exceptional cash closure costs of £10m.
