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Solvay to close soda ash plant in Portugal, reduce costs by €100 million
12:11 PM MDT | June 6, 2013 | Natasha Alperowicz
Solvay plans to rationalize its European soda ash operations in order to improve its long-term profitability, the company announced today. Solvay signalled last year that it is working on an action plan to make the business profitable, particularly in Europe, and reinforce its position as a world leading producer. The company, as part of the plan, intends to reduce its European cost base by an annualized €100 million ($131.2 million) by 2016 compared with 2012. Solvay will focus on a breakthrough competitiveness improvement of its key synthetic soda ash plants in Europe, while expanding its trona mining-based operations in North America. Solvay is expanding by 12% its capacity at Green River, WY.
The company plans an in-depth transformation at its 6 main soda ash plants in Europe, which will continue to operate and close the Povoa, Portugal unit. The transformation will focus on the Mediterranean basin. Solvay’s European soda ash plants are based at Bernburg and Rheinberg, Germany; Denya, Bulgaria; Dombasle, France; Rosignano, Italy, Torrelavega, Spain and Povoa, Portugal.
Solvay will close its Povoa plant by January 2014, as first revealed in CW. Its Rosignano facility meanwhile will run according to market needs. Solvay will also use more efficiently the full potential of its world-class synthetic plants at Torrelavega, Spain and Devnya, Bulgaria to enhance its competitiveness both in Europe and export markets. These European restructuring measures will affect about 450 jobs by 2016, including Povoa.
Solvay has been working to address different regional market dynamics for soda ash. Demand for soda ash, used in the manufacture of glass and detergent, has been growing at GDP rates globally but in Europe the business has been hit by the economic downturn, which resulted in overcapacity.
“We are determined to strengthen our cost-leadership as the best-in-class producer of both synthetic and natural soda ash,”Our ambitious three-year action plan will enable the group to rise up to the challenges and adapt to changes in the competitive landscape while ensuring our profitability for the long term,” he said. said Pascal Juéry, president of Solvay/essential chemicals. “