10 December 2008 14:10 [Source: ICIS news]
LONDON (ICIS news)--LANXESS will cut production at a third of its 45 German plants by January due to weak demand, a company spokesman said on Wednesday.
He said discussions had started with unions and a final decision would be made in the next week.
The spokesman would not comment on which plants would shut down, but said that reduced operating rates were due to weak downstream demand from the automotive, construction and general chemicals markets.
He added that shutdowns were planned for the Christmas period at some plants but that maintenance scheduled for later in 2009 may be brought forward.
The spokesman would not comment on how many jobs out of the total workforce in ?xml:namespace>
Credit Suisse analysts said in a note to clients that the company had confirmed that this was simply part of the actions it described and initiated at its third quarter results release when it gave an earnings guidance update.
“Therefore this does not indicate that the external environment has deteriorated more than the company expected, and we do not expect an amendment to guidance on the back of this,” the analysts said.
“Our model already has volumes down 4.2% and prices down 5% in Q408,” they added.
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