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Brunner Mond looks to future after heavy losses

UK soda ash giant Brunner Mond says it is poised to turn the corner after ending a tough year with heavy losses.
The Northwich company, taken private in a UK 145 million deal in 1998, made 132 UK wor…

UK soda ash giant Brunner Mond says it is poised to turn the corner after ending a tough year with heavy losses. The Northwich company, taken private in a UK 145 million deal in 1998, made 132 UK workers redundant, most voluntarily, and a further 71 jobs went in Kenya – the equivalent to a sixth of its workforce. As the price of soda ash continued to drop, it saw turnover in the six months to December fall 10.6% from UK 82.9 million to UK 74.1 million, plunging it deeper into the red. After paying interest of UK 10.1 million, the group was left with half-year losses of UK 7.3 million, against UK 3.3 million in the same period of 1998. Operating profits fell 47% in the last three months of 1999 to UK 2.3 million. The company, which has made cost savings of UK 8 million in the past year, has taken a heavy knock from excess global capacity of soda ash forcing down prices in all of its markets. There has also been reduced demand in the UK, made worse by the decision of one of its major customers to close a UK plant. Brunner Mond – the UK“s only producer of soda ash and the second largest in Europe – has also switched some of the UK workload to its Netherlands plant, which enjoyed record output. Mark Chitty, director of human resources, says the company sees better prospects for this year after negotiating price cuts with all of its suppliers. “There are improved volume prospects for the year 2000. There seems to be a recovery happening in the economy generally that tends to pull through more glass sales and more soda ash sales. “Prices are still reducing, but the increased volume will help offset that.” The company is also preparing to close down its three ageing power plants and switch to a new UK 150 million gas-fired combined heat and power plant being built on its head office site by Powergen. Some staff from Brunner Mond“s Steam and Power division have transferred across to Powergen, which will own and operate the new plant. A Powergen spokesman said it was one of the most efficient plants of its type in the UK. “In addition to supplying the steam and electricity requirements of Brunner Mond, the CHP plant will generate approximately 90 megawatts of electricity for export to the national distribution network.”

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