Fitch cuts Alkimia

Fitch Ratings said it downgraded Societe Chimique Alkimia's national long-term rating to BB(tun) from BBB(tun) and national short-term B(tun) from F3(tun).

The outlook is negative.

According to the agency, the downgrade reflects Fitch's view that Alkimia's operations are heavily threatened by worsening business conditions.

While Alkimia managed to impose regular price reviews on its customers in 2008, the agency said that continuous increases in raw material prices, mainly phosphoric acid which accounts for about 45% of the company's operating costs, are likely to motivate substitution and undermine Alkimia's earnings.

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