COMPANIES & MARKETS

Losses due to devaluation of the real

Brazil. The Brazilian company Braskem reported that it lost 2,492 million reais (about US$1,047 million) last year, mainly due to the devaluation of the real against the dollar in the last months of 2008, since the company depends significantly on the foreign market, both for its sales and for the calculation of its costs.

The Invertia.com portal reported that according to the financial balance published by the company to its investors, most of the losses (2,108 million reais -US$885.7 million) were accounted for in the last quarter of 2008, when the dollar rose from about 1.60 to 2.50 reais as a result of the global financial crisis.

However, the firm's liquid revenues fell by only 4%, from 18,788 million reais (about US$7,894.1 million) in 2007 to 17,960 million reais (about US$7,546.2 million) in 2008.

This allowed the company to close the year with a positive operating result (Ebitda) of 2,418 million reais (about 1,015.9 million dollars), although 26 percent lower than in 2007.

Akzo Nobel and ChemPoint join forces

USA The Dutch multinational company, Akzo Nobel, announced that the chemical distributor Chempoint was chosen to be the supplier of the products and services of the Interpon brand in the United States and also to provide assistance in the areas of marketing, sales technicians, personalized assistance service and fulfillment in orders for customers around the North American country.

Dave Heflin, Marketing Director of Akzo Nobel in the Americas, commented, "This partnership will allow us to reach users and industrial companies without prior access to these advantages. In these extraordinary times, customers need innovation, service and support, and alongside ChemPoint we are in a great position to offer these products in the hands of powder coating users in the industry."

ChemPoint also distributed Rohm and Haas products for four years but last December the link between the two companies was suspended.

Dow Corning announced job cuts

United States. Dow Corning Corporation announced its intention to eliminate approximately 800 jobs at its global headquarters as a result of the current economic crisis. The decision involves approximately 8% of the company's workforce and will begin to take effect during the first half of the year, covering all countries where the company is present.

The actions will be achieved through a combination of voluntary retirement programs which will be offered in the United States and a part in other global headquarters, while the involuntary layoff program will be proposed in the United Kingdom.

These actions are part of the extensive savings measures adopted by the company, including the maximization of operational efficiency and a perfect control of expenses.

Basf reports losses

Germany. Chemical company BASF reported a drop in fourth-quarter operating profit and is poised to face a decline in sales and profits in 2009 as demand from key sectors such as auto and construction shows no signs of rebounding.

"2009 will be a year of unprecedented challenges," Chief Executive Juergen Hambrecht said in a statement reproduced by Reuters. "The situation in our sales markets is getting worse and inventory levels in the value chain are still too high," he added.

The group expects global chemical production to fall by 2% in 2009. It also reported that its fourth-quarter earnings before interest and taxes (EBIT) fell 70% to $670 million.

The firm had a net loss of $393 million in the quarter. Quarterly sales fell 2.7% to $17.95 billion.

As a result, BASF announced that it will eliminate some 1,500 of its 97,000 jobs, through the closure of plants in the United States, Asia and Europe.

Deficit in the balance of the paint sector

Brazil. The paints and varnishes sector in Brazil reported exports of US$167.36 million during 2008, representing an increase of 18% over the results of 2007. This was assured by the Union of the Paints and Varnishes Industry of the State of São Paulo, Sitivesp.

According to the Union, imports also registered an increase of close to 40%, equivalent to US$230 million, compared to the data of the previous cycle.

Until September 2008, before the economic crisis, the performance of the trade balance in the paints and varnishes sector showed the consolidated numbers now, but the projection was of a change in this scenario due to the new panorama of the world economy. "It was expected that when the dollar appreciated, exports would improve and imports would be greatly reduced, which in fact did not happen," said Sitivesp's management advisor, Airton Aparecido Sicolin.

The trend is for the pace of imports to slow down in 2009, reducing the deficit in the sector's trade balance. Currently, exports represent about 6% of the total turnover of the industry, including the architectural, industrial and automotive repainting lines.

The union also announced that imports in 2008 were 40,960 tons and had an average value of US$5.62 per kg., while exports totaled 61,443 tons, with an average price of US$2.72 per kg.

The main market for Brazilian paintings is the bloc of Mercosur countries, with a share of 44%.