Elementis, the world’s largest chromium producers, say the new environmental regulations under consideration by Brussels will force them to cut European manufacturing by up to 40% and move production to Asia were the red tape is less onerous. They are preparing to close two of their five European plants to minimise the cost of compliance with the new regulations.
The new rules under REACH – regulation, evaluation and authorisation for chemicals – are due to be passed through the European parliament. Western chromium producers are struggling to improve margins in the face of high energy costs and cheap imports from the former USSR. They also face a shrinking US market where new rules will come into force next year that will ban domestic use of chromium-copper-arsenic preservatives.
According to Elementis, they face costs of $12.2 million to comply with the new European rules as well as an estimated 14% drop in US sales. Elementis sell more than $158.3 million worth of chromium and have two US production plants, in North Carolina and Texas.
Source: Financial Times
