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Solvay suspends soda ash production in Egypt, but continues quicklime production

| By Gerald Ondrey

Solvay S.A. (Brussels, Belgium; www.solvay.com) is to suspend until further notice the production of soda ash at its plant in Alexandria, Egypt, as sharply higher energy costs have undermined the plant’s profitability. Customers will be served from Solvay’s other soda ash plants.

Production of quicklime​​ will continue at the Alexandria site, with good prospects in the region including in construction. ​Quicklime, also known as calcium oxide, is used in steel, pulp-and-paper and gold mining.

Solvay aims to minimize the impact of this temporary decision on its employees. Measures include seeking alternative uses for this conveniently located industrial platform.

The decision to mothball production will result in an asset impairment of about €​90 million, after tax, to be booked in Solvay’s first-quarter 2016 results.

The soda ash plant’s profitability has been declining since 2014 when a gas price increase of 2.5 times outweighed Solvay’s continuous efforts to improve production performance through lower energy consumption and increased operational efficiency.