Borregaard to close fine chemicals plant in Madone, Italy
Borregaard has decided to close its fine chemicals plant in Madone near Milan, Italy. The plant has 80 employees. Borregaard's fine chemicals business in Italy produces fine chemicals for products used in various technical-chemical industries, including strategic raw materials for Borregaard's plants in Norway and China.
The closure comes as a consequence of significant operating losses in the Madone plant in recent years. This is largely due to substantial over-capacity and little overall growth in the markets concerned, which have led to pressure on prices and margins. At the same time, the cost of raw materials for several products has increased as a result of high oil prices. A number of improvement programmes have been implemented to reduce costs and increase revenues, but they have not had sufficient impact. Borregaard has also tried to sell the plant without success.
Borregaard sees no signs of long-term improvement in the operating parameters for the Madone plant. However, Borregaard will continue to supply its current customers and markets with similar products from other sources.
Borregaard has another plant in Italy, in Ravenna, which, among other things, supplies raw materials to the Madone plant. The prospects for continuing operations at the Ravenna plant are better and Borregaard is currently trying to find new owners for this plant.
The closure of the Madone plant and the sale of the Ravenna plant are elements in the restructuring of Borregaard's fine chemicals operations outside Norway that was announced earlier this year.
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