Closures at National Starch

- Last updated on GMT

Related tags: Plant

Higher raw material costs continue to eat into margins for National
Starch, the starch ingredients arm of ICI, as third quarter figures
bore out last month. It comes as no surprise this week that the
company announced a 'redesign' of operations.

Higher raw material costs continue to eat into margins for National Starch, the starch ingredients arm of ICI, as third quarter figures bore out last month. It comes as no surprise this week that the company announced a 'redesign' of operations.

Two starch manufacturing plants are to go - in Canada and the UK - by the end of 2004, but a drive in Asia will see the completion of a new starch modification facility in Shanghai, China.

Job losses as a result of the restructuring at National Starch - that saw profit for the nine month period tumble by 10 per cent from £166 million in 2002 to £145 million in 2003 - are as yet uncertain. "We cannot yet specify the net effect as some new jobs will also be created,"​ a spokeswoman for the company told FoodNavigator.com​.

On the flip side, the company plans to modernise three of its starch modification facilities in the new year, but the figure for investment remained closely guarded. When asked how much the company had earmarked for the 'redesign', the company told FoodNavigator.com: "We cannot answer at this stage as some of the projects are just getting underway."

The sites proposed for closure by the end of 2004 are the company's Collingwood, Canada, plant and the Tilbury, UK, factory. Manufacturing sites in the US, at Indianapolis and North Kansas City, are tagged for modernisation as well as the site in Hamburg, Germany. The company also expects to complete a starch modification factory in 2004 in Shanghai, China, to service the emerging Asian market.

"The plant expansions will be designed to provide additional manufacturing flexibility while keeping production costs as low as possible,"​ said James Zallie, senior vice president of National's Natural Polymers group.

Third quarter figures reported by UK chemical group ICI last month revealed that despite a 3 per cent lead on sales for the same quarter in 2002 from £453 million to £467 million due to price increases and strong growth in Asia and Latin America, higher raw material costs had a significant impact on the final figures for National Starch.

Related topics: Market Trends

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