Clariant to cut 2,200 jobs and close 10% of sites

14 November 2006 11:15  [Source: ICIS news]

LONDON (ICIS news)--Swiss specialty chemicals company Clariant said on Tuesday that it plans to cut 2,200 jobs, close 10% of its global sites and reduce its product range by 25% in an effort to reduce the company’s cost structure.

 

Due to be completed by 2009, the initiative is expected to cost the company around SFr500m (€314m/$402m).

 

The company said plant closures would mainly focus on Europe, but did not specify which sites or products will be affected.

 

Clariant currently employs 22,000 people, down from 28,000 three years ago

 

The measures are expected to increase the company’s Return on Invested Capital (ROIC) from 8% to 10% by 2009.

 

Analysts from Citigroup said in a report that little improvement in Clariant’s profit was expected in the next four years, adding that Clariant’s track record for holding on to cost savings is relatively poor.

 

However, Citigroup said it expected the initiative to save the company around SFr225-250m annually.

 

Clariant added that it plans to invest SFr100m in Asia over the next four years, concentrating on China and India, creating new capacity to meet expanding domestic demand.

 

The Asian expansion would be especially important in the company’s application-driven business in the functional chemicals division, it added.

By: Mark Watts
+44 20 8652 3214

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