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CHEMTURA, A US-based producer of plastic additives, urethane polymers and agrochemicals, has filed for Chapter 11 bankruptcy protection in the US. The filing only affects the company’s US operations; its non-US subsidiaries will continue trading as normal while the company restructures.

Chemtura’s ceo Craig Rogerson says: "Like other companies in our industry and around the world, Chemtura's order volumes have declined markedly in recent months due to the impact of the global economic recession. This has led to a significant decrease in our liquidity and cash flow.” Efforts to increase liquidity, including cutting its dividend and putting businesses up for sale, did not succeed in averting the current crisis.

The global economic downturn meant that the company struggled to refinance $374m in debts which matured in July. Chemtura tried to sell its crop protection chemicals, its petroleum additives business or both, but was unable to secure a sale before a 90-day waiver extending another loan until the end of March expired, forcing it to declare bankruptcy.

The company will now use the protection of Chapter 11 bankruptcy protection to restructure its operations to strengthen the balance sheet and gain financial flexibility. It joins Lyondell Chemical, the US subsidiary of LyondellBasell, which filed for bankruptcy in January.

Chemtura had sales of $3.7b in 2007 and employs some 5000 people around the world. The company was formed in 2005 with the merger of Crompton and Great Lakes Chemical, which brought together Crompton & Knowles, Uniroyal Chemical and Witco.