Synthomer reorganises SBR operations ahead of paper & carpet exit in Europe

London – Synthomer plc has completed the reorganisation of its styrene butadiene rubber (SBR) latex operations in Europe, as part of a move to streamline operations globally. 

With the reorganisation, said the London group 15 Nov, Synthomer can now start the process to divest its European paper and carpet operations “ahead of plan”.

The move is part of Synthomer’s strategy to reduce costs and complexity and follows the group’s exit from the “loss-making” paper and carpet operations in the US.

In addition, the UK supplier said it had implemented “a modest step-up in investment” to drive growth in speciality end-markets, principally in Asia and the US.

Providing an update on its performance, Synthomer said the overall trading had been broadly consistent with its expectations.

Amid “subdued volumes and limited visibility” due to the challenging macro conditions, the group’s speciality businesses delivered “significantly more resilient pricing and volumes” compared to base chemical products.

Base chemicals, Synthomer added, have been subject to “increased global competition and greater negative operating leverage.”

Following the £276 million (€320 million) rights issue in mid-October (ERJ report), Synthomer said it had increased focus on delivering speciality solutions strategy, alongside ongoing activities to preserve cash.

The group said it did not anticipate "any improvement in customer demand for the remainder of 2023".

In addition, it noted a "risk of modest further slowdown in activity in certain base chemicals areas if market trends seen in the third quarter persist.”

The group still expects to make sequential progress in the second half of 2023, driven mainly by its previously announced “self-help measures”.

By focusing on the strong parts of the portfolio, the group aims to reposition itself “to deliver on its substantial potential for value creation”, said CEO Michael Willome.

The group, he added, is confident its earnings power in the medium term is “more than double recent run-rate levels”.