Italy-based bioplastics manufacturer Novamont has announced that it will be temporarily cutting production and placing workers on temporary layoff as of 1 July 2022 at its Terni production site. The company anticipates the measures will remain in place for up to as long as 13 weeks, according to reports in the local press.
Novamont cited the ‘"persistence of a situation of strong uncertainty in the reference market and, despite the interventions implemented by the company to cope with the increase in the costs of raw materials and energy, the effects of war in Ukraine and the increasingly unsustainable situation of the site's economic conditions’ as the reasons behind the layoff decision.
Novamont, which produces its Mater-Bi bioplastic at the site in Terni, also referred to the "negative and distorting factors” that are driving developments contrary to the intentions of Europe’s Green Deal and forcing the company to take these steps as a precaution. These factors include the steep increase in the prices of raw materials and energy costs, despite the measures implemented by the company in the first half of last year and the quantities of fossil-based products on the market from Asia, that are being sold at prices that clearly suggest dumping. Moreover, Novamont says it has been negatively affected by ‘the perverse effect of the costs for the purchase of CO2 credits’ despite the fact that in 2021, renewable raw materials comprised 58% of its production, significantly contributing to a reduction in carbon emissions, without these products allowed to be counted in the calculation of the total CO2 emissions.
As well, the company said that the regulations regarding carrier bags were still being flouted on a wide scale, with some 30% of the bags in circulation not in compliance with the law, as were the those relating to the single-use plastic directive. Uncertainty in the bioindustry sector continues to persist as formal recognition of the origin and economic and environmental value generated by the entire Italian supply chain is still lacking.