By Patrick Raleigh UT On-line news editor
Northfield, Illinois-Stepan Co. is seeking a waiver to the terms of its loan agreements in view of anticipated fourth quarter 2003 losses. The company said it started negotiations with its creditors after estimating a net loss of $3.5-4.0 million for the period ended 31 Dec. 2003.
Stepan linked the anticipated loss in part to various one-off factors. These included a deferred compensation payment of $1.4 million, asset-impairment charges of $1.1 million at its Millsdale site in Joliet, Illinois, and costs of $0.7 million related to a 5-percent reduction of its US workforce.
“Business conditions, particularly within our surfactant group, remain slower than anticipated and margins continue to be under pressure from higher raw material costs,” said F Quinn Stepan, the firm’s chairman and chief executive officer.
“We believe we will improve operating results through continued cost containment and capitalising on new business opportunities,” the Stepan boss added, in a 16 Jan press statement.
Stepan manufactures speciality and intermediate chemicals for consumer products and industrial applications. The firm’s diverse portfolio includes aromatic polyester polyols (APP) and foam systems for rigid PU foam insulation products.
Last June, Stepan started up an APP production facility in Wesseling, Germany, to complement an existing polyols production unit at its Millsdale site.
Stepan said it expects to report results for the fourth quarter and full year 2003 on 11 Feb, 2004. “