Slow Economy Hits More Chemical Firms

The economic slowdown continues to take a toll on chemical firms. Ferro CEO James F. Kirsch expects that sales for the first quarter of this year will be below the $432 million in sales the company reported in the fourth quarter of 2008. He adds that the firm has slashed capital spending plans in half for 2009 to $35 million, and it has also delayed filing its year-end statement with the Securities & Exchange Commission to complete discussions with lenders over changes to credit agreements. Because of the poor economic environment, stock analyst Dmitry Silversteyn of Longbow Research says, “a significant loosening of covenants likely needs to occur to avoid a possible violation” for Ferro. Separately, plastics compounder A. Schulman says it doesn’t see an imminent recovery in demand and will eliminate 104 jobs to achieve annual savings of more than $5 million. It is also reducing capacity at European and Mexican facilities. And W.R. Grace says its pending emergence from bankruptcy reorganization may be delayed “until the current crisis in the global credit markets more fully abates” because of difficulties in obtaining the $1 billion it needs in new financing.