The interim profit result for UCM (formerly Universal Ceramic Materials) dipped as consumer confidence in Europe and the US fell.

Sales into the automotive and steel making industries, primarily of the zirconia family, were usefully ahead of last year whilst sales of electrical grade magnesia for use in domestic and industrial appliances were lower, particularly in the major economies.

Despite increasingly difficult trading conditions in certain areas during the period, the Group’s overall turnover for the six months to 30 June 2001 rose to £17,823,000 (2000: £17,517,000). Profits before taxation of £2,371,000 were slightly lower than the £2,539,000 in the comparable period.

In line with its stated strategy, the Group continues to invest in additional capacity in the higher value-added product areas. Capital expenditure in the six months amounted to £920,000, almost as much as the previous twelve month’s £1,052,000.

The major investments at present are for significantly increased capacity for the production of zirconia at the plant in Greeneville, Tennessee, and for additional capacity for the production of advanced ceramic materials at Stafford in the UK.

This will extend the scope of the new fused zircon sand plant at UCM’s subsidiary, Universal America Inc. in Greeneville, Tennessee, which was commissioned early 1998, using zircon sand mined locally in North America. This facility has enabled the Group to significantly reduce its dependence on baddeleyite, which is declining in availability and quality, whilst rising in price. At the same time, it has opened up new opportunities in the market place due to the improved quality obtained from fused zircon sand.

Given the general economic outlook, trading conditions in the short term are unlikely to improve. Demand for magnesia, in particular, is expected to remain soft while other markets are not immune to weak consumer and industrial demand.