IRISH INDUSTRIAL explosives company Kemek Ltd saw its profits fall by 36 per cent last year as the economic downturn, increased competition, and a substantial increase in raw materials costs hit its bottom line.
Kemek, which is half owned by Irish-listed building materials group CRH, posted a pretax profit of €12.8 million in the year to December 31st, 2008, according to accounts provided to The Irish Times.
This compared with a surplus of €20 million in 2007.
Kemek’s turnover fell by 13 per cent to €43.8 million as the company felt the impact of a downturn in housing activity and road construction.
The decline in sales has continued into 2009, with turnover down by about 50 per cent, the company said.
In response to the difficult trading conditions, the Maynooth-based group has restructured its operation.
Staff numbers have been cut by one-third, with 40 employees leaving the business.
The company has also been operating a three-day week since February.
Kemek, which is led by chief executive John Higgins, told The Irish Times it expected to achieve breakeven in the current year when the cost of its restructuring was taken into account.
The 2008 accounts show that Kemek took a charge of €1.6 million in redundancy expenses.
“The outlook for 2010 remains very challenging, with further significant reductions in demand forecast as civil engineering contracts finish and with no new projects in the pipeline,” Kemek said.
“In addition, other sectors such as housebuilding and commercial and industrial construction remain depressed and show no immediate signs of recovery.”
Kemek’s 2008 accounts show that the company paid dividends of €14.45 million to shareholders, up from €11.68 million in the previous year.
The accounts also show sales to CRH companies last year amounted to €7.6 million.
Founded in 1964 by Seán O’Sullivan and Paddy O’Neill as Irish Industrial Explosives, the company’s main factory is in Enfield, Co Meath.
It also operates Ulster Industrial Explosives in Northern Ireland.
