Evonik announces cost savings, job cuts, board restructure

24 September 2013 10:33  [Source: ICIS news]

LONDON (ICIS)--Evonik is to pursue a raft of measures to reduce its administrative costs, including up to €250m ($338m) cost savings by 2016, a reduction in executive board numbers, and job cuts, the Germany-based specialty chemicals company said late on Monday.

The company, which went public earlier this year, attributed the cutbacks to an over-large administrative burden that is not necessary for its current corporate structure. Administrative costs have increased by 26% since 2008, Evonik added.

“Over the past five years Evonik has been restructured from an integrated conglomerate to a listed specialty chemicals company,” Evonik said in a statement.

“In many respects, the present administrative functions still reflect the needs of Evonik’s former structure as a conglomerate,” the company added.

Evonik’s executive board is to be reduced to four from six members as of the beginning of 2014, with operational responsibility for the whole specialty chemicals business within the board to be transferred to Patrik Wohlhauser.

Thomas Haeberle and Dahai Yu are to leave the company as of 31 December 2013. There are also expected to be job cuts across Evonik's administrative departments.

The company did not elaborate on the extent or location of job cuts, stating that it would elaborate in coming months. However, a framework agreement to refrain from dismissals for operational reasons is to be extended for two years to the end of 2018.

According to CEO Klaus Engel, the measures are intended to streamline workflow across the organisation.

"We want to create an administrative organisation that has a common stamp worldwide, without duplication of responsibilities on the one hand and unacceptable additional workloads on the other. To achieve this, we will be reviewing all administrative workflows and systematically identifying scope for improvement,” he said.

The announcement follows fellow German specialties producer LANXESS’ announcement of €100m in annual savings and 1,000 job cuts by 2016. Last week also saw French producer Arkema announce that it will cease production of its phthalic anhydride and dioctyl phthalate plant in Chauny, France in March 2014.

($1 = €0.74)

By: Tom Brown
+44 208 652 3214

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