06 July 2009 14:14 [Source: ICIS news]
LONDON ICIS news)--BASF intends to sell or close 23 of 55 former Ciba Speciality Chemical production sites worldwide as it integrates its acquisition of the Basel, Switzerland-headquartered producer, the chemicals giant said on Monday.
BASF plans to cut 3,700 jobs as part of the process as it seeks to generate annual cost savings of €400m ($560m) a year from 2012.
Savings of about €300m a year were expected by the end of 2010 when most of the job cuts will have been made, it said.
A decision on the production sites was expected by the end of the first quarter of 2010. The remaining 32 production sites would be optimised, absorbed into the BASF global network or restructured, it added.
BASF has already said it would retain a strong presence in Ciba’s home city. Its new paper chemicals division is headquartered there and two associated business units: Coatings & Starch Europe and Wet End Chemicals.
The European plastics additives business and units for technology management and restructuring of the pigments business have been relocated to the former Ciba headquarters. It has established a new ?xml:namespace>
The job reductions represent about 28% of the former Ciba workforce of 13,000 although job cuts within BASF have not been ruled out, BASF said in a Reuters report.
“This is unfortunately not good news for some of our employees,” BASF CEO Jurgen Hambrecht said. “But the combined businesses can be successful in the long term only if we optimise them and exploit the full potential for synergies.”
The integration process is expected to cost €550m ($775m) in cash, with about €150m charged in 2009. Non-cash integration costs will be reported in the company’s second quarter financial report.
BASF closed its $5.1bn acquisition of Ciba in April.
($1 = €0.71)
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