Degussa could close fine chems plants, cut jobs

05 October 2005 18:05  [Source: ICIS news]

LONDON (ICIS news)--The accelerated restructuring of Degussa's fine chemicals division could lead to global plant closures and job losses, a spokeswoman for the German specialty chemicals company said on Wednesday.

“We do not rule out any option,” said Hannelore Gantzer, without giving a specific time scale for potential changes to the business.

A sale of its UK-based Laporte fine chemicals business, which Degussa acquired in 2001, could not be excluded, she said.

Degussa said earlier today that it is to take an impairment charge of Euro830m ($1bn) following unsatisfactory business trends and a sharp reduction in earnings prospects from its fine chemicals activities.

It also said restructuring of the fine chemicals activities would be stepped up, resulting in an additional non-operating expense of Euro20m ($24.1m) this year. This will bring the total restructuring costs for the division this and last year to Euro100m.

Degussa is not optimistic about the future of the fine chemicals industry, said Gantzer. However, she added that the company is “convinced” that with these restructuring measures, Degussa will return its fine chemicals business to profitability.

The business is divided into three business units – Building Blocks, Exclusive Synthesis & Catalysts and Peroxygen Chemicals. It employs 5,000 people worldwide.  

Degussa shares fell 1.18% to Euro36.75 during trading on the Frankfurt stock exchange today following the impairment charge announcement.

By: Hilde Ovrebekk
+44 20 8652 3214

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