ICI to cut 600 jobs in Europe

05 November 2001 00:00  [Source: ICB]

ICI is to cut 600 jobs in Europe as part of a £120m ($172m) restructuring plan, which will see its global workforce of around 40 000 people reduced by 1300 over the next two years.

The group blamed an uncertain economic environment for the cutbacks, which will reduce its UK workforce by 275, or 5.5%. About 550 jobs will be lost in the US, and 120 elsewhere. Acheson's speciality engineering lubricants plant in Plymouth, UK, will be closed.

ICI said the restructuring programme would pay back in two and a half years, delivering annual savings of £60m and reducing working capital by over £50m.

Slowing economic growth has also hit ICI's third quarter pre-tax profits, which fell 11.5% to £108m, on sales from continuing operations 4.8% lower at £1.60bn.

The results, which exceeded most analysts' expectations, followed ICI's admission that proceeds from the planned sale of its 30% stake in the Huntsman International joint venture, created in 1999, are unlikely to be received this year and could be deferred beyond 2002.

Although ICI has now exercised its right to sell its stake to Huntsman, it may have to wait over 14 months for the proceeds. The delay has amplified concerns over Huntsman's ability to meet all its financial obligations.

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