Clariant commences further restructuring
27/01/2009
Speciality chemical company Clariant has announced sales of CHF 8.1 billion for the full year 2008 compared to CHF 8.5 billion in 2007. This translates into a 1% growth in local currency and a 5% decline in CHF.
Clariant said it went through two distinct phases during fiscal year 2008. In the first nine months, the company continued to benefit from the then-stable economic environment, when a focus on improving operational performance and restructuring “paid off”.
But in the fourth quarter, the company said it was “significantly impacted by an unprecedented decline in global economic activity”. The demand in some of Clariant's customer industries, including leather, “decreased dramatically” in line with overall trends in the world economy.
As a result of the deterioration of the leather and textile markets in particular and of what Clariant has called “their uncertain evolution in 2009”, it has revised its plans for these two businesses. Slowing down or closing parts of its production in the businesses that have been impacted is part of this reaction, as well as measures such as releasing temporary workforce, reducing overtime, compulsory holiday periods and short-time work.
“Going forward, Clariant will adapt its structures to the economic situation and by the same token address the performance gap towards its peers by decisively downsizing the company and reducing expenditure—in particular sales, general and admin (SG&A) costs,” the company said in a statement. “Clariant plans to substantially decrease personnel costs and, as a first step, reduce an additional 1,000 job positions mainly in the SG&A area. This is in addition to the approximately 2,200 headcount reduction announced in 2006 and almost completed by the end of 2008. The clear focus in 2009 will be on cash generation.”
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