Struggling chemicals business Penrice Soda Holdings has forecast a full year loss amid weakening demand for the soda ash it produces.

Penrice is coming off a $28 million first half net loss – $3.3 million excluding impairment charges.

That followed a full year $26.2 million net loss for the 2010/11 financial year – $1.4 million excluding impairment costs.

Penrice has been hit by weaknesses in the glass packaging and construction industry.

The high Australian dollar has hit demand for bottles, such as those used for Australian wine.

Penrice is Australia’s only producer of soda ash – used in glass and washing powder – and sodium bicarbonate.

Penrice chairman David Trebeck said while he expected to post a full year loss, the second half performance would be stronger, reflecting new cost saving initiatives.

He would not provide specific guidance, citing uncertainty with domestic and international economies and the high Australian dollar.

Penrice has flagged selling its quarry and mineral business, including a limestone mine in South Australia, and said in a statement on Monday that it had begun cutting labour and other costs.

The cuts had “improved the company’s earnings profile”, Mr Trebeck said.

The Adelaide-based company was also positive about the prospects of its multi-million dollar joint venture with US giant General Electric to commercialise technology its says cleans water contaminated by the coal seam gas industry and produces saleable chemicals as a byproduct.

Last year, the company also faced a hostile 8.0 per cent shareholder in London City Equities, which won a court battle to inspect the company’s books amid concerns about repeated earnings downgrades.

Penrice shares closed steady at 7.9 cents.