To withstand the economic meltdown, Nova Chemicals reduces spending

03-Dec-08

In a bid to withstand the economic meltdown, Canada's ethylene, polyethylene and styrene maker Nova Chemicals plans to cut capital spending for the rest of this year and through 2009. The company expects 2008 expenditures to total US$160 mln from its initial range USUS$200-225 mln. This figure will be further reduced to US$100 in 2009. Over all, the company expects to improve its 2009 cash position by about US$410 mln, including a reduction in business and corporate costs of US$50 mln, savings at its Ineos Nova joint venture of USUS$40 mln and completion of a key crude deal for savings of US$110 mln. A weaker Canadian dollar is expected to account for US$150 mln of total cash improvement. Ineos Nova, the styrene and polystyrene ventures, are expected to run at break even next year. Its Beaver Valley plant in Monaca, Pa. has been temporarily shuttered and a delay has been announced in commencement of operations at Ontario polyethylene projects by 12 to 18 months.