07 August 2001 12:36 [Source: ICIS news]
LONDON (CNI)--BASF revealed on Tuesday that it plans to have cut 4000 jobs by the end of 2002 as part of its major restructuring programme.
The German group said that in addition to the measures and closures it has already announced, involving about 2800 job losses, it expects to reduce its 92 000-strong global workforce by a further 1200 in the next 18 months. It announced plans in June to close 10 sites and 14 additional plants, and to slash capital expenditure by 20% to Euro2.4bn this year.
A spokeswoman explained that the previously announced job cuts result from various closures in the US, as well as in Arnhem in The Netherlands, Birkenhead and Tarragona, Spain.
To implement the restructuring, BASF recorded special charges of Euro447m ($396m) in its second quarter results. These led to a 79% drop in second quarter pre-tax profits before minority interests to Euro201m. Sales for the second quarter fell 7% to Euro8.33bn and operating profits before special items were down 15% at Euro751m.
BASF plans to achieve annual cost savings of Euro400m from the streamlining of its organisation. In addition, the group expects to save Euro160m by the end of 2002 by further optimising its global procurement of technical goods and services. Site and plant closures are expected lead to cost savings of Euro190m.
Of the Euro447m in special charges, BASF said Euro200m is connected to capacity reductions and the resulting job cuts and the remainder is related to the cost of closing sites, in particular in the US, the UK and The Netherlands. Some Euro126m of the costs are associated with the Birkenhead, UK site which will not be rebuilt after a fire, it added.
Restructuring measures in the US include the closure of the Princeton, New Jersey research and development (R&D) centre for plant protection with the loss of 450 jobs, said the spokeswoman. The closure of an acid plant plus a plant for paper process chemicals in Freeport, Texas is expected to result in some 25 job cuts. BASF has also announced the closure of a vitamin manufacturing facility in Wyandotte, Michigan, and a vitamin premix plant in Whitestone, South Carolina.
In addition, BASF has completed the sale of its carbon-coated fibre business to Shakespeare Co and announced the closure of the production facility for antistatic conductive fibres. Both of these manufacturing plants are located in Enka, North Carolina, US.
In Europe, the closure of the polymer dispersions plant in Arnhem will result in the loss of some 140 jobs, according to the spokeswoman, while the Birkenhead closure will result in some 178 job cuts. BASF is also shutting its oxo alcohols and neopentylglycol plants in Tarragona.
The group has not specified which other plants it will close or where the additional job cuts will be located.
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