Russia's Polyplastic pulls plug on compound supply to Autocomponent in debts row

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Russia’s biggest plastics processor Polyplastic has pulled the plug on new shipments of compound material to its top auto parts customer in a bitter row over alleged unpaid debts totalling €1.71m.

The Moscow-based plastics group said that reluctantly, it had now suspended the supply of plastics compounds for car parts production by its longstanding customer Automotive Components Ltd (Autocomponent) of Nizhny Novgorod, in central western Russia last month.

Polyplastic said it was forced to take “this hard decision” over Autocomponent’s persistent  non payment of a long overdue debt after negotiations to end the dispute, going on since autumn 2017, failed.

The supplier claimed that Autocomponent failed to comply with an agreement to settle the debt in 2017 reached by the companies last year, although its offshoot R&P Polyplastic had delivered a full consignment of compounds for the first quarter of 2018.

In September 2017, Polyplastic revealed Autocomponent’s debt had reached about €1.18m and there was no sign the client wanted to resolve the dispute “constructively”.  The supplier announced then it was halting compound supply to the key customer.

Polyplastic threatened then that it might have to resort to court action if it was unable to conduct dialogue and reach understanding over the debt with Autocomponent.

In its latest statement on the matter issued at the end of April, R&P Polyplastic again stressed its willingness to resume normal business with the auto parts moulder.

“The amount due constitutes a risk to the working assets of the company (R&P Polyplastic) and exceeds all acceptable limits.... (But,) considering our long term relations, we are ready to continue with supplies as soon as our customer comes forward with the initiative to settle the debt,” commented Andrey Menshov, managing partner of R&P Polyplastic.

Polyplastic has stressed that the ongoing dispute only involves the key automotive group and does not affect any of its other customers.

Autocomponent, with plants in Togliatti and Nizhny Novgorod, manufactures more than 2,700 different interior and exterior vehicle parts including plastics based fuel tanks, bumpers, mirrors and interior trim.

The group serves a number of Russian car and truck manufacturers including AvtoVAZ, GAZ and Sollers as well as global automotive giants like Volkswagen, Renault-Nissan, Datsun, Skoda, Faurecia.  It also makes components for other sectors among them railways, aviation, marine, construction and packaging.

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