News from Notch Consulting, Inc.

February 3, 2009

Century Enka Cuts Tire Cord Output by 35–40%

Filed under: General, Tire Cord — Notch @ 11:22 pm

On December 30, 2008, Century Enka Ltd. announced that it was continuing its production curtailment for NTCF (nylon tire cord fabric), which was originally announced in mid-December. The Indian company has cut NTCF production by 35%–40% due to reduced demand from tire companies. The slowdown caused the company to build up excess inventories.

In the stock filing, Century Enka stated, “We regret to inform you that this partial suspension is still continuing as there is no revival in NTCF demand from tyre companies. At present, the production cut is in the range of 35-40%.”

The details of production and sales during the October-December 2008 quarter as compared to corresponding quarter of the previous year are as follows:

Products (Chips / Synthetic Textile Yarns / NTCF) – Sales
– October to December 2008 – 26,661 MT
– October to December 2007 – 29,564 MT

Products (Chips / Synthetic Textile Yarns / NTCF) – Production
– October to December 2008 – 27,507 MT
– October to December 2007 – 29,666 MT

Goodyear Reducing North America Production

Filed under: Uncategorized — Notch @ 10:42 pm

According to Rubber & Plastics News, Goodyear is reducing production of truck and passenger tires at its North American plants due to weak demand. The reduction is expected to last at least over the next several months, and will affect truck tire plants in Danville, Virginia and Topeka, Kansas, as well as passenger tire plants in Union City, Tennessee; Fayetteville, North Carolina; Lawton, Oklahoma; Napanee, Ontario; and Gadsden, Alabama. More details here (subscription required).

Responding to Downturn, Lanxess Shortens Work Hours, Cuts Salaries

Filed under: General, Rubber Chemicals — Notch @ 4:36 pm

Lanxess AG (Leverkusen, Germany) has announced a series of measures to deal with the global recession. Called “Challenge ’09,” the program includes the “introduction of a 35-hour working week with a corresponding remuneration decrease as of March 2009 for initially 12 months” and the elimination of bonuses for 2009. Lanxess agreed on the measures — which cover about 5,000 German non-managerial employees — after holding negotiations with employee representatives and the IG BCE (the German Mining, Chemical and Energy Industry Union). On the management side, Lanxess announced that the company’s managerial employees as well as its Board of Management would see a salary reduction of 10% of fixed salary, while fixed salary reviews for 2009 will be postponed by at least six months.

Here is the press release.

Private Investment in Emerging Markets to Decline 82% in 2009

Filed under: General — Notch @ 4:08 pm

The Wall Street Journal has an article (subscription required) detailing the rise in protectionism as the global economy falters. The article also highlights a startling drop in new private capital being invested in emerging markets.

Public officials and business leaders warned that the global recession could sharply reduce lending across borders and lead to more subsidies tucked away in economic-stimulus plans. Investment of private capital to emerging markets this year is expected to be 82% lower than it was in 2007.

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