Solvay Indupa posts US$70mn 2002 profit

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Friday, February 28, 2003

Argentine petrochemical company Solvay Indupa reported 2002 net profits of 225mn pesos (US$70mn), an improvement on a 135mn peso loss posted in 2001, the company said in a statement to the Buenos Aires stock exchange.

Total revenues increased 37% to 1bn pesos due to a recovery in chemicals prices and demand in 4Q02, the statement said.

The Argentine market for PVC increased 19% in 4Q02 compared to the third quarter, prompting Solvay to cut PVC exports 34% and focus on the domestic market, the statement said.

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A shortage of caustic soda imports boosted the domestic market 7% in 4Q02 compared to the same period in 2001, and exports climbed 69% due to increasing demand in the Brazilian market. Caustic soda prices also increased in the 4Q02 relative to the third quarter.

Solvay's Brazilian subsidiary Solvay Indupa do Brasil also had a good fourth quarter, with higher production and sales in both PVC and caustic soda.

Solvay's 2002 earnings were also given a boost by lower marketing and administrative costs which accounted for 11% of total revenues, as compared to 14% in 2001.

The PVC and caustic soda markets are expected to continue growing in Argentina and Brazil in 2003, with prices rising accordingly, the statement said.

Solvay is a leading petrochemical firm within the Mercosur trade bloc in the production of PVC tubing products and caustic soda. The company operates plants in Argentina and Brazil.