Rain Industries: Subsidiary to shutdown Netherlands facility

Rain Industries Limited’s subsidiary Rain Carbon Inc. has announced that its Board of Directors have approved the shutdown of its Uithoorn resins production facility in the Netherlands by the end of March 2020.

As per the company's management, on the back of the erosion of profitability for hydrocarbon and C9 aromatic resins, particularly for printing inks and adhesives, the production from the said plant will cease by the end of the first quarter next year. The increased competition from low-cost resins produced in Asia and the development of alternative products and technologies are reducing demand for the resins produced at Uithoorn.

The company has reached an agreement with the affected work counsels on a responsible social plan for the 60 Uithoorn employees who will be displaced by the plant closure. For the customers, the management has informed that the business will continue with full production at the plant till the March 2020 shutdown and the company would meet the customer requirements for hydrocarbon and C9 aromatic resins with shipments from Uithoorn through August 2020.

The company is also developing plans to help customers transition to resins that will be produced at the company's new hydrogenated hydrocarbon resin plant in Castrop-Rauxel, Germany, as well as at its Duisburg facility in Germany, where a US$10 million modernisation project is underway to enhance quality and reliability of supply.

The management said that even though the plant is getting closed, the revenues will be mostly shifted from Uithoorn, the Netherlands to Duisburg, Germany.

On Wednesday, the stock of Rain Industries opened at Rs. 87.85 per share, up by 3.2 per cent from its previous close of Rs. 85.15.