Price dip behind EVC loss

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The Independent Online
EVC International, the biggest maker of PVC in Europe, has crashed into the red and warned its problems are far from over. The company, which is part-owned by ICI and Enichem of Italy, floated on the Amsterdam stock exchange in 1994. It said yesterday that a slump in prices for plastics was principally behind a 7.8m guilders (pounds 3m) first-half loss compared with a 152.7m guilders profit in the same period last year.

Profit margins on PVC were the lowest for a decade, caused by higher prices for the raw material ethylene and lower selling prices. Competition from Eastern European rivals flooding western Europe with cheap PVC had also hurt EVC's market share in some countries, Ettore dell'Isola, chairman, said.

"We were confronted with cheap imports from countries such as Romania which offer low quality products. It was our decision not to compete on price and we therefore lost market share in certain countries," he added.

EVC's overall market share, however, remained stable due to gains made in Germany, Mr dell'Isola said.

The second half of the year is, however, traditionally slow and there are no signs of an easing in raw material prices. The company has also suffered production problems due to the severe winter and maintenance shut-downs.

The news unsettled EVC's shares, which fell 10 per cent immediately after the results were announced to 46.5 guilders before regaining some ground to close 3 per cent down on the day - helped by a 43 per cent boost in the interim dividend to 1 guilder a share.