Clariant ready for possible economic slow down

14 February 2008 16:52  [Source: ICIS news]

LONDON (ICIS news)--Clariant is ready to deal with any economic slowdown although it does not see any evidence of one, the Swiss company’s CEO said in a conference call following the release of its 2007 results.

“We are cautious about volume,” Clariant's Jan Secher said in regard to the outlook. “[Margin] increases are based on the action we take rather than on growth.”

Secher said that although there have been suggestions that the market is moving towards a slow down, and that the US is heading toward a recession, the company has not seen that in the segments it serves.

Sales volumes in the fourth quarter of 2007 were similar to those achieved in the same period in 2006, he added.

Secher said Clariant was raising prices and tackling underutilised capacity by closing sites.

The company saw raw material costs rise by 7% in 2007 but pushed up product prices to hold the margin decrees to 1.3%. “We need more price increases,” Secher said.

Clariant reduced its production portfolio by 20%, which generated very good cashflow in 2007, he added.

However, 2008 operating income is expected to be hit by further restructuring costs – restructuring costs for 2007 equated to Swiss francs (Swfr)262m ($238m/€163m).

($1 = Swfr1.10/€1 = Swfr1.61)

By: Lucy Craymer
+44 20 8652 3214

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