UpdateSABIC to shut PP lines in Germany, Dutch PPO asset

19 April 2013 17:10  [Source: ICIS news]

(adds further information on job cuts from Dutch trade union in paragraphs 8-10)

SABIC building (source: SABIC)LONDON (ICIS)--SABIC will shut down assets in Bergen op Zoom, the Netherlands, and Gelsenkirchen, Germany, as part as part of a previously announced restructuring programme which will see 1,050 jobs cut, the Saudi Arabian petrochemical major said on Friday.

The company said two older polypropylene (PP) lines in Gelsenkirchen have been earmarked for closure, while a polyphenylene ether (PPO) asset in Bergen op Zoom will be shut down.

SABIC said business from the PPO asset would be transferred to its site in Selkirk, the US. Business from the two units in Gelsenkirchen will be transferred to another PP facility at the same site, the company added.

SABIC also confirmed jobs will be cut in Raamsdonkveer, Geleen, Bergen op Zoom and Sittard in the Netherlands, Teesside in the UK, Cartagena, Spain and in Gelsenkirchen.

The restructuring programme is expected to be completed by the end of 2014, however SABIC will start implementing the changes as soon as possible.

“We have started the consultation process with the respective works councils and employee representatives this week. The timing of the outcome of this consultation process may differ per location but we are hoping to provide clarity as from mid-July,” SABIC said.

Around two thirds of the planned job cuts across Europe will involve SABIC employees. The remainder of the cuts will come from contracting staff. SABIC said the job cuts will take place across all business units, operations and staff functions. Information about cuts at a departmental or individual level are subject to the consultation process, it added.

According to Dutch-based trade union FNV Bondgenoten, around 420 of the jobs cuts will occur in the Netherlands.

Mariette van Dijk, spokesperson for FNV Bondgenoten, said 300 jobs will disappear at the SABIC head offices in Sittard and Geleen, while in Raamsdonkveer, Amsterdam and Enkhuizen, another 120 jobs will be lost.

She also said the trade union fears more jobs will be lost in the Netherlands because at least a 100 temporary jobs have not been incorporated into its numbers.

SABIC did not disclose the cost of the restructuring.

On Thursday, SABIC announced a planned restructuring programme designed to strengthen its European businesses. The company said at the time the planned organisation has been redesigned “to be more focused and efficient at delivering to customers’ needs at the highest environmental, health and safety standards.”

SABIC added that lower consumer spending in the European market has led to slower growth, which has “structurally reduced demand and squeezed margins”, while competition has intensified from other regions, especially from the US and Asia.

Additional reporting by Tom Brown

By: Franco Capaldo
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