LyondellBasell reports that it has begun consultations with territorial trade unions in Italy regarding management of potential redundancies resulting from the closure of one of its two polypropylene production units at its Brindisi location.
The unit in question is the oldest of its kind in the world and has become uncompetitive, according to LyondellBasell. “The market environment for our polypropylene products of this Brindisi unit has become increasingly challenging, and the outlook provides little improvement. The intention of our group is to strengthen the position of the company's other assets in higher value markets,” said Jim Guilfoyle, senior vice president Olefins and Polyolefins EAMEI.
The site produces materials for the production of textiles, food packaging, and other applications.
“We understand the intended closure may impact some of our employees,” added Guilfoyle. “We are committed to discuss solutions with unions and social parties to support them in the best way possible. The supply to our customers will continue.”
In its Q2 2023 earnings report, LyondellBasell’s sales dropped to $10.3 billion from $27.9 billion in the second quarter of 2022, with net income falling to $715 million compared with $2.9 billion in the same period.
Looking ahead to the third quarter of 2023, the company said in the earnings report that it expects typical benefits from summer seasonality to be more than offset by soft demand due to ongoing economic uncertainty. “Stagnant demand, volatile feedstock costs, and new capacity in North America and China are challenging petrochemical margins,” it noted, adding that it “believes current market conditions will persist amid challenging economic conditions and a slower than expected recovery in China.”
