The Australian Chemical Industry is facing a massive financial crisis as its debts mount, with the industry reeling from the global economic downturn.
The Australian Industry Group says it has been in a “catastrophic financial state” for nearly a decade and expects to have to slash its workforce by 20 per cent.
But what’s not clear is what that means for the industry’s ability to pay its bills, as well as whether the government is prepared to take on more debt in the future.
“We’re at a very precarious point,” the AICG’s chief executive, Chris Trewin, told News Corp. “This is a financial catastrophe that is not going to be resolved.”
Trewun said the industry needed to slash spending by 40 per cent over the next two years and to close up shop on facilities in Queensland, New South Wales and Victoria.
He said the financial crunch was “not going to come down until it is a much more sustainable and sustainable industry”.
The AICg has warned the industry that it needs to cut costs by 80 per cent to stay afloat.
AIC chief executive Chris Treslin is blaming the government for the financial crisis, but says the industry needs to save more than $20 billion to stay solvent.
“The Government’s position is to take out more debt and the AEC is a big part of that,” Mr Trewins told News Ltd.
Mr Tresin said the AICS had to reduce costs by 70 per cent by 2020 and the cost of operations by 75 per cent within that time. “
But the longer-term, the Government is going to need to do more to keep the industry afloat.”
Mr Tresin said the AICS had to reduce costs by 70 per cent by 2020 and the cost of operations by 75 per cent within that time.
He warned the AICA was “struggling” to keep up with this trend and “needed to look at all options”.
“We need to find more money for operations, more money to pay staff and the ability to fund our operations to stay relevant,” Mr Tereslin said.
“I think the AICO is in a very perilous position.”
The AICS has been facing financial problems for more than a decade.
The AICA has been unable to meet its own financial obligations.
Photo: Andrew Meares It said the group had been forced to make redundancies at its two Australian laboratories, one in Sydney and another in Adelaide, and said it had to cut staff by 25 per cent and cut the number of employees it employs by about half.
“Our financial position has become very precarious,” Mr Meares said.
In an interview with the ABC, Mr Trelin also said the company’s debt was the largest in the world.
“There’s a lot of debt that’s owed to our partners and the banks and the Commonwealth Bank,” he said.
The government has been criticised for its handling of the crisis.
Former premier Mike Baird has been described as a “lacklustre” leader and his government has taken a series of unpopular and damaging actions to reduce the industry.
It has also been criticised by the Business Council of Australia for its inaction on the industry, which it described as the “largest industry in Australia”.
AIC Group chief executive and former NSW premier Mike Broughton says he believes the government should take more action.
Photo : Andrew Measles Mr Trenlin said the Government had not been “credible” in taking tough action to reduce debt.
“When you are in this position, you have to go with the flow and the way that’s working for us,” he told News Corporation.
“You’ve got to have a policy where you’re going to keep doing things and we’re going with the flows and not having the government say to us, ‘What are you doing?'”
Mr Trexin said a series in the past had shown the AIA could “stand up to adversity”.
“You need to stand up to this adversity and we need to be able to withstand it,” he added.
“That is the nature of the business and we have to be capable of surviving.”
The Government has been accused of taking a “dismal” approach to the crisis, with former Premier Mike Baird having been described by the AACI as “lackingluster”.
The group says it needs $1.5 billion from the Government for the next financial year, including $900 million for the Australian Chemical Institute (ACI) and $900,000 for the Australia Chemical Council.
The group has also said it needs about $1 billion to run its operations in Queensland and NSW.
AOC chief executive Clive Barker has been one of the most vocal critics of the government’s handling of its financial situation.
Photo:- Getty Images “I’m really concerned about the government not having enough money to do the things it needs,” Mr Barker told ABC Radio’s Today program.
“If you’re running a business you need to have enough money for