Rain Industries stock tumbles 7% as its European subsidiary temporary closes unit due to natural gas shortage

9 Sep 2022 , 01:22 PM

Rain Industries stock tumbles over 8% as its wholly-owned subsidiary Rain Carbon Inc announced that it has temporarily closed an operating unit in Europe and is developing additional energy-related contingency plans for its other European production units.

The temporary closure of unit is in anticipation of potential natural gas shortages and price spikes during the upcoming winter months resulting from the unprecedented and unpredictable geopolitical environment, the company said in a regulatory filing.

“As Europe is witnessing severe natural gas situation, the expected decrease in consumer demand during the cold winter months for certain products and the risk of continued rise in gas prices we have conducted a thorough analysis of the energy-intensity of each production unit at our European plants and are closely evaluating whether it makes economic sense to temporarily reduce or shut down additional production lines in the event the situation worsens,” said Gerry Sweeney, President of Rain Carbon.

Rain Carbon’s European footprint is essential to handle the company’s global operations, and these decisions are being made to ensure the long-term viability of operations. Additionally, the company is closely monitoring its suppliers and customers, as some of them are taking similar actions that could indirectly or directly impact operations as well. 

Any measures taken are expected to be temporary, and Rain Carbon is fully committed to returning to full operations when the situation improves.

At around 1:23 PM, Rain Industries Ltd is currently trading at Rs187 per share down by Rs14.35 or 7.13% from its previous closing of Rs201.35 per share on the BSE.

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