Millennium Chemicals reports a loss

Demand is way down for its white pigment

October 31, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

With demand falling for the white pigment used in everything from house paint to U.S. currency, Millennium Chemicals Inc. reported yesterday that it lost $12 million in the third quarter.

The loss follows the September idling of part of the company's Hawkins Point titanium dioxide plant in the southern part of Baltimore and the layoff of about 250 employees. The section that was shuttered makes pigment for the paper industry, while the part that remains in operation makes pigment for paints and plastics.

In the three months that ended Sept. 30, the New Jersey-based company lost 20 cents a share, compared with a profit of 55 cents a share - $35 million - in the year-earlier period. Sales were $393 million, down from $473 million.

Titanium dioxide sales volume was down 13 percent - or 150,000 metric tons - in the quarter and sales revenue fell 21 percent, to $286 million from $361 million.

Sales in its acetyls business were down 10.5 percent to $85 million, and its fragrance-and-flavor business saw an increase of 29 percent to $22 million.

The company said in a statement it expects the current quarter also to be challenging.

"Sales volumes [of titanium dioxide] for the fourth quarter are expected to decline seasonally from third-quarter levels," the statement said. "Millennium will continue throttling back its plants to match market demand with supply. These anticipated production cutbacks and resulting lower plant operating rates will decrease our fixed cost absorption, and negatively impact profits in the fourth quarter."

Mickey Foster, Millennium's vice president for corporate and investor relations, said the production cutbacks were not expected to result in further job cuts. "Nothing is planned right now," he said.

For the first nine months of the year, Millennium posted a loss of $51 million on sales of $1.256 billion compared with a year-earlier profit of $108 million on sales of $1.359 billion.

Millennium's shares were down a penny yesterday to $9.84.

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