Italian manufacturer of VCM/PVC -Vinyls Italia, files for liquidation

02-May-09

Italian manufacturer of VCM/PVC Vinyls Italia, has filed for liquidation as per a decision formalized by the company Board of Directors. This decision comes barely a month after the firm was acquired by Fiorenzo Sartor company Safi after nine months of negotiations. The Italian VCM-PVC business of the Ineos Group was transferred to the Italian company Safi. The British group sold Safi the entire stock package of its subsidiary, Ineos Vinyls Italia SpA, renamed Vinyls Italia SpA, with plants in Porto Marghera, Ravenna, and Porto Torres, that operates in the production of PVC Suspensions and Emulsions. The focal point influencing this decision has been litigation with the ENI Group, supplier of feedstock ethylene and ethylene dichloride required by the company to produce vinyl chloride monomer (VCM) and then PVC. Litigation includes feedstock cost increases and unpaid back debt inherited from the previous management, coupled with preventative attachment of considerable quantities of PVC in the warehouses by several creditors. Despite Sartor signing a supply agreement when it acquired Vinyls Italia, Eni has cut off EDC and ethylene supplies as Sartor has been charged with failure to keep pace with payments. Sartor has alleged that price quoted by Eni is way above market price- almost twice more than what the company is reported to have paid for a recent cargo from France.