Croda closing Bromborough site

London - Croda International Plc is to close its 115-employee operation at Bromborough, Merseyside, which manufactures commodity and industrial speciality chemicals. The company is to move production of key specialities to other sites.

The Bromborough site was part of the company's Uniqema acquisition in 2006. Bromborough. In 2008, the discontinued business had a turnover of £45.3 million and made a £2.1million operating profit, helped by favourable glycerine pricing but made a loss in the final quarter of 2008 which has worsened into 2009.

There will be an exceptional asset write off of around £30.0m and exceptional cash closure costs of approximately £10.0 million, although the latter will be significantly offset by the release of working capital.

"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."

The closure was announced by Martin Flower, chairman of Croda International in an update on first quarter trading: Despite the difficult economic climate, the core Consumer Care business produced record revenues and profits. In this division, sales increased 26.6% to £133.7m and operating profit grew 37.0% to £28.9m with Personal Care, Health Care and Crop Care trading strongly.

However, said Flower, Croda's Home Care business is seeing underlying sales and profits decline, while weaker demand in Industrial Specialities has continued since the year end with sales down 19.7% to £97.1m. Basic commodity sales and true industrial speciality volumes are down by similar amounts and this, together with the absence of last year¹s glycerine benefit, is the reason for the profit decline in this segment, resulting in an operating loss of £2.6m.