CALGARY�Nova Chemicals Corp., Calgary, reports a $266 million profit in 2000, compared with $217 million in 1999, despite a fourth quarter loss of $12 million.
Factors in the fourth quarter slide included a slowdown in the US economy, weakening product demand in Asia, high natural gas prices, and a decline in chemical product prices. A $51 million after-tax charge for closing an unprofitable polystyrene plant in Joliet, Ill., was also a factor. Nova said fourth quarter earnings would have been $39 million without the one-time charges.
Overall in 2000, Nova had improved revenues of $3.9 billion compared with $2.8 billion in 1999.
Nova, which has plants at 18 locations in five countries, has cut production by 30% to 35% at its major Joffre complex in Alberta, where it operates three ethylene units and a polyethylene plant, with a second polyethylene plant nearing completion. Production at Joffre will not be increased until the price of gas falls significantly.
Nova Pres. and CEO Jeff Lipton said the current �unusual and difficult market conditions� are unlike any he has seen in 36 years in the industry.
�There�s no doubt the short term will be tough, but I believe it will represent a clear bottom for the industry,� Lipton said.
He expects the market to begin improving in March, and beyond 2001, he said consultants have forecast that new and existing capacity will not be able to meet demand.
