Chemtura announced that in “light of the changes in economic conditions”, it would be implementing a new restructuring programme to reduce fixed costs. Chemtura says that it has seen order volumes decline as its customers experience, or anticipate, reductions in demand from the industries that they serve. These order reductions primarily relate to Chemtura's Polymer Additives and Performance Specialties business segments in electronic, polyolefin, building and construction, and general industrial applications.
Chemtura says that in light of reduced demand and with the expectation that the implementation of an upgraded management system will improve the efficiencies of business and management processes, Chemtura will implement a new restructuring initiative to reduce cash fixed costs by approximately $50m. This initiative will involve a worldwide reduction in its professional and administrative staff by approximately 500 people, which represents a reduction of around 20% of its workforce.
The company recently announced a five-point plan to boost liquidity and reduce debt to improve financial flexibility as it copes with the declining demand. The plan includes inventory reductions, a suspension of dividends, lower capital spending, tight cost controls and further capacity rationalisations.
In addition, the financial crisis was expected to delay Chemtura’s review of strategic options that had included the divesture of further assets following recent disposals of oleochemicals and organic peroxide.
Chemtura is also adjusting its plant production rates to align with customer demand and its inventory reduction goals, and, as a result, is modifying work hours and furloughing or reducing production personnel as required.
Please also see US Chemtura aims to emerge from bankruptcy in 2010 on ICIS news.
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Chemtura Corporation is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. Chemtura was formed on 1 July 2005 from the merger of Crompton Corporation and Great Lakes Chemical.
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